Correlation Between BNK Financial and Korea Refract
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Korea Refract 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 Korea Refract 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 Korea Refract, you can compare the effects of market volatilities on BNK Financial and Korea Refract 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 Korea Refract. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Korea Refract.
Diversification Opportunities for BNK Financial and Korea Refract
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNK and Korea is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract 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 Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of BNK Financial i.e., BNK Financial and Korea Refract go up and down completely randomly.
Pair Corralation between BNK Financial and Korea Refract
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.88 times more return on investment than Korea Refract. However, BNK Financial Group is 1.14 times less risky than Korea Refract. It trades about 0.12 of its potential returns per unit of risk. Korea Refract is currently generating about -0.05 per unit of risk. If you would invest 653,035 in BNK Financial Group on September 1, 2024 and sell it today you would earn a total of 402,965 from holding BNK Financial Group or generate 61.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Korea Refract
Performance |
| Timeline |
| BNK Financial Group |
| Korea Refract |
BNK Financial and Korea Refract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Korea Refract
The main advantage of trading using opposite BNK Financial and Korea Refract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Korea Refract 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 Korea Refract will offset losses from the drop in Korea Refract's long position.| BNK Financial vs. Samsung Electronics Co | BNK Financial vs. Samsung Electronics Co | BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group |
| Korea Refract vs. GS Retail Co | Korea Refract vs. Kukdo Chemical Co | Korea Refract vs. Korea Investment Holdings | Korea Refract vs. Sung Bo Chemicals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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