Correlation Between BNK Financial and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Daelim Trading 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 Daelim Trading 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 Daelim Trading Co, you can compare the effects of market volatilities on BNK Financial and Daelim Trading 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 Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Daelim Trading.
Diversification Opportunities for BNK Financial and Daelim Trading
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BNK and Daelim is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading 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 Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of BNK Financial i.e., BNK Financial and Daelim Trading go up and down completely randomly.
Pair Corralation between BNK Financial and Daelim Trading
Assuming the 90 days trading horizon BNK Financial is expected to generate 1.63 times less return on investment than Daelim Trading. But when comparing it to its historical volatility, BNK Financial Group is 1.53 times less risky than Daelim Trading. It trades about 0.08 of its potential returns per unit of risk. Daelim Trading Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 273,000 in Daelim Trading Co on August 29, 2024 and sell it today you would earn a total of 13,000 from holding Daelim Trading Co or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Daelim Trading Co
Performance |
| Timeline |
| BNK Financial Group |
| Daelim Trading |
BNK Financial and Daelim Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Daelim Trading
The main advantage of trading using opposite BNK Financial and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.| BNK Financial vs. Kukdong Oil Chemicals | BNK Financial vs. Stic Investments | BNK Financial vs. Daejung Chemicals Metals | BNK Financial vs. DSC Investment |
| Daelim Trading vs. AptaBio Therapeutics | Daelim Trading vs. Daewoo SBI SPAC | Daelim Trading vs. Dream Security co | Daelim Trading 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 Stocks Directory module to find actively traded stocks across global markets.
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