Correlation Between EV Advanced and BNK Financial
Can any of the company-specific risk be diversified away by investing in both EV Advanced 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 EV Advanced and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and BNK Financial Group, you can compare the effects of market volatilities on EV Advanced 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 EV Advanced with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and BNK Financial.
Diversification Opportunities for EV Advanced and BNK Financial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 131400 and BNK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material 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 EV Advanced 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 EV Advanced Material 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 EV Advanced i.e., EV Advanced and BNK Financial go up and down completely randomly.
Pair Corralation between EV Advanced and BNK Financial
Assuming the 90 days trading horizon EV Advanced Material is expected to under-perform the BNK Financial. In addition to that, EV Advanced is 2.01 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 0.11 per unit of volatility. If you would invest 821,912 in BNK Financial Group on September 27, 2024 and sell it today you would earn a total of 251,088 from holding BNK Financial Group or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EV Advanced Material vs. BNK Financial Group
Performance |
| Timeline |
| EV Advanced Material |
| BNK Financial Group |
EV Advanced and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and BNK Financial
The main advantage of trading using opposite EV Advanced and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced 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.| EV Advanced vs. Ssangyong Information Communication | EV Advanced vs. Korea Information Communications | EV Advanced vs. Shinhan Inverse Copper | EV Advanced vs. Heungkuk Metaltech CoLtd |
| BNK Financial vs. Jeju Beer Co | BNK Financial vs. Kyung In Synthetic Corp | BNK Financial vs. Youngchang Chemical Co | BNK Financial vs. Aprogen Healthcare Games |
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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