Correlation Between BNK Financial and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Hankook Furniture 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 Hankook Furniture 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 Hankook Furniture Co, you can compare the effects of market volatilities on BNK Financial and Hankook Furniture 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 Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Hankook Furniture.
Diversification Opportunities for BNK Financial and Hankook Furniture
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BNK and Hankook is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture 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 Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of BNK Financial i.e., BNK Financial and Hankook Furniture go up and down completely randomly.
Pair Corralation between BNK Financial and Hankook Furniture
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.8 times more return on investment than Hankook Furniture. However, BNK Financial Group is 1.24 times less risky than Hankook Furniture. It trades about 0.43 of its potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.24 per unit of risk. If you would invest 940,000 in BNK Financial Group on September 4, 2024 and sell it today you would earn a total of 152,000 from holding BNK Financial Group or generate 16.17% 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. Hankook Furniture Co
Performance |
| Timeline |
| BNK Financial Group |
| Hankook Furniture |
BNK Financial and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Hankook Furniture
The main advantage of trading using opposite BNK Financial and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| BNK Financial vs. Dongjin Semichem Co | BNK Financial vs. AhnLab Inc | BNK Financial vs. Posco ICT | BNK Financial vs. CJ ENM |
| Hankook Furniture vs. Samlip General Foods | Hankook Furniture vs. Seohee Construction Co | Hankook Furniture vs. Semyung Electric Machinery | Hankook Furniture vs. Daekyung Machinery Engineering |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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