Correlation Between BNK Financial and GS Engineering
Can any of the company-specific risk be diversified away by investing in both BNK Financial and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on BNK Financial and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and GS Engineering.
Diversification Opportunities for BNK Financial and GS Engineering
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNK and 006360 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of BNK Financial i.e., BNK Financial and GS Engineering go up and down completely randomly.
Pair Corralation between BNK Financial and GS Engineering
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.98 times more return on investment than GS Engineering. However, BNK Financial Group is 1.02 times less risky than GS Engineering. It trades about 0.06 of its potential returns per unit of risk. GS Engineering Construction is currently generating about -0.02 per unit of risk. If you would invest 993,000 in BNK Financial Group on August 31, 2024 and sell it today you would earn a total of 60,000 from holding BNK Financial Group or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. GS Engineering Construction
Performance |
| Timeline |
| BNK Financial Group |
| GS Engineering Const |
BNK Financial and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and GS Engineering
The main advantage of trading using opposite BNK Financial and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| BNK Financial vs. Lotte Energy Materials | BNK Financial vs. Daishin Information Communications | BNK Financial vs. Display Tech Co | BNK Financial vs. Iljin Display |
| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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