Correlation Between ECSTELECOM and BNK Financial
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and BNK Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ECSTELECOM and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and BNK Financial Group, you can compare the effects of market volatilities on ECSTELECOM and BNK Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ECSTELECOM with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and BNK Financial.
Diversification Opportunities for ECSTELECOM and BNK Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ECSTELECOM and BNK is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and BNK Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Financial Group and ECSTELECOM is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ECSTELECOM Co are associated (or correlated) with BNK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Financial Group has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and BNK Financial go up and down completely randomly.
Pair Corralation between ECSTELECOM and BNK Financial
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the BNK Financial. In addition to that, ECSTELECOM is 1.22 times more volatile than BNK Financial Group. It trades about -0.03 of its total potential returns per unit of risk. BNK Financial Group is currently generating about 0.08 per unit of volatility. If you would invest 645,159 in BNK Financial Group on September 1, 2024 and sell it today you would earn a total of 410,841 from holding BNK Financial Group or generate 63.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. BNK Financial Group
Performance |
| Timeline |
| ECSTELECOM |
| BNK Financial Group |
ECSTELECOM and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and BNK Financial
The main advantage of trading using opposite ECSTELECOM and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, BNK Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BNK Financial will offset losses from the drop in BNK Financial's long position.| ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Mirae Asset Daewoo | ECSTELECOM vs. Finebesteel |
| BNK Financial vs. Samsung Electronics Co | BNK Financial vs. Samsung Electronics Co | BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |