Correlation Between BNK Financial and Bohae Brewery
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Bohae Brewery 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 Bohae Brewery 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 Bohae Brewery, you can compare the effects of market volatilities on BNK Financial and Bohae Brewery 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 Bohae Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Bohae Brewery.
Diversification Opportunities for BNK Financial and Bohae Brewery
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BNK and Bohae is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Bohae Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohae Brewery 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 Bohae Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohae Brewery has no effect on the direction of BNK Financial i.e., BNK Financial and Bohae Brewery go up and down completely randomly.
Pair Corralation between BNK Financial and Bohae Brewery
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.73 times more return on investment than Bohae Brewery. However, BNK Financial Group is 1.38 times less risky than Bohae Brewery. It trades about 0.14 of its potential returns per unit of risk. Bohae Brewery is currently generating about -0.03 per unit of risk. If you would invest 659,528 in BNK Financial Group on September 4, 2024 and sell it today you would earn a total of 528,472 from holding BNK Financial Group or generate 80.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Bohae Brewery
Performance |
| Timeline |
| BNK Financial Group |
| Bohae Brewery |
BNK Financial and Bohae Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Bohae Brewery
The main advantage of trading using opposite BNK Financial and Bohae Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Bohae Brewery 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 Bohae Brewery will offset losses from the drop in Bohae Brewery's long position.| BNK Financial vs. Dongjin Semichem Co | BNK Financial vs. AhnLab Inc | BNK Financial vs. Posco ICT | BNK Financial vs. CJ ENM |
| Bohae Brewery vs. LG Display | Bohae Brewery vs. Hyundai Motor | Bohae Brewery vs. Hyundai Motor Co | Bohae Brewery vs. Hyundai Motor Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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