Correlation Between BNK Financial and Dongwon System
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Dongwon System 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 Dongwon System 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 Dongwon System, you can compare the effects of market volatilities on BNK Financial and Dongwon System 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 Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Dongwon System.
Diversification Opportunities for BNK Financial and Dongwon System
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNK and Dongwon is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System 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 Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of BNK Financial i.e., BNK Financial and Dongwon System go up and down completely randomly.
Pair Corralation between BNK Financial and Dongwon System
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.5 times more return on investment than Dongwon System. However, BNK Financial Group is 1.99 times less risky than Dongwon System. It trades about 0.08 of its potential returns per unit of risk. Dongwon System is currently generating about 0.02 per unit of risk. If you would invest 614,089 in BNK Financial Group on September 26, 2024 and sell it today you would earn a total of 458,911 from holding BNK Financial Group or generate 74.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Dongwon System
Performance |
| Timeline |
| BNK Financial Group |
| Dongwon System |
BNK Financial and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Dongwon System
The main advantage of trading using opposite BNK Financial and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| BNK Financial vs. Lotte Energy Materials | BNK Financial vs. INNOX Advanced Materials | BNK Financial vs. Union Materials Corp | BNK Financial vs. EV Advanced Material |
| Dongwon System vs. BNK Financial Group | Dongwon System vs. Shinhan Financial Group | Dongwon System vs. Hana Financial | Dongwon System vs. Top Material 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |