Correlation Between Digital Imaging and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Digital Imaging 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 Digital Imaging and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Imaging Technology and BNK Financial Group, you can compare the effects of market volatilities on Digital Imaging 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 Digital Imaging with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Imaging and BNK Financial.
Diversification Opportunities for Digital Imaging and BNK Financial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digital and BNK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Digital Imaging Technology 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 Digital Imaging 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 Digital Imaging Technology 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 Digital Imaging i.e., Digital Imaging and BNK Financial go up and down completely randomly.
Pair Corralation between Digital Imaging and BNK Financial
Assuming the 90 days trading horizon Digital Imaging Technology is expected to under-perform the BNK Financial. In addition to that, Digital Imaging is 2.61 times more volatile than BNK Financial Group. It trades about -0.02 of its total potential returns per unit of risk. BNK Financial Group is currently generating about 0.12 per unit of volatility. If you would invest 660,456 in BNK Financial Group on September 12, 2024 and sell it today you would earn a total of 434,544 from holding BNK Financial Group or generate 65.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Imaging Technology vs. BNK Financial Group
Performance |
| Timeline |
| Digital Imaging Tech |
| BNK Financial Group |
Digital Imaging and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Imaging and BNK Financial
The main advantage of trading using opposite Digital Imaging and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Imaging 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.| Digital Imaging vs. SK Hynix | Digital Imaging vs. People Technology | Digital Imaging vs. Hana Materials | Digital Imaging vs. SIMMTECH Co |
| BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group | BNK Financial vs. Hana Financial | BNK Financial vs. Woori 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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