Correlation Between BNK Financial and Lotte Non
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Lotte Non 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 BNK Financial and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNK Financial Group and Lotte Non Life Insurance, you can compare the effects of market volatilities on BNK Financial and Lotte Non 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 BNK Financial with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Lotte Non.
Diversification Opportunities for BNK Financial and Lotte Non
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNK and Lotte is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Lotte Non Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and BNK Financial 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 BNK Financial Group are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of BNK Financial i.e., BNK Financial and Lotte Non go up and down completely randomly.
Pair Corralation between BNK Financial and Lotte Non
Assuming the 90 days trading horizon BNK Financial is expected to generate 1.15 times less return on investment than Lotte Non. But when comparing it to its historical volatility, BNK Financial Group is 2.31 times less risky than Lotte Non. It trades about 0.07 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 154,800 in Lotte Non Life Insurance on October 13, 2024 and sell it today you would earn a total of 55,700 from holding Lotte Non Life Insurance or generate 35.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Lotte Non Life Insurance
Performance |
| Timeline |
| BNK Financial Group |
| Lotte Non Life |
BNK Financial and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Lotte Non
The main advantage of trading using opposite BNK Financial and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Lotte Non 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 Lotte Non will offset losses from the drop in Lotte Non's long position.| BNK Financial vs. Digital Power Communications | BNK Financial vs. Ssangyong Information Communication | BNK Financial vs. DONGKUK TED METAL | BNK Financial vs. Kbi Metal Co |
| Lotte Non vs. Jeju Bank | Lotte Non vs. Jb Financial | Lotte Non vs. BNK Financial Group | Lotte Non vs. KakaoBank Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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