Correlation Between BNK Financial and Sungmoon Electronics
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Sungmoon Electronics 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 Sungmoon Electronics 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 Sungmoon Electronics Co, you can compare the effects of market volatilities on BNK Financial and Sungmoon Electronics 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 Sungmoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Sungmoon Electronics.
Diversification Opportunities for BNK Financial and Sungmoon Electronics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNK and Sungmoon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Sungmoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungmoon Electronics 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 Sungmoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungmoon Electronics has no effect on the direction of BNK Financial i.e., BNK Financial and Sungmoon Electronics go up and down completely randomly.
Pair Corralation between BNK Financial and Sungmoon Electronics
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.45 times more return on investment than Sungmoon Electronics. However, BNK Financial Group is 2.24 times less risky than Sungmoon Electronics. It trades about 0.27 of its potential returns per unit of risk. Sungmoon Electronics Co is currently generating about 0.05 per unit of risk. If you would invest 1,063,000 in BNK Financial Group on October 23, 2024 and sell it today you would earn a total of 84,000 from holding BNK Financial Group or generate 7.9% 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. Sungmoon Electronics Co
Performance |
| Timeline |
| BNK Financial Group |
| Sungmoon Electronics |
BNK Financial and Sungmoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Sungmoon Electronics
The main advantage of trading using opposite BNK Financial and Sungmoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Sungmoon Electronics 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 Sungmoon Electronics will offset losses from the drop in Sungmoon Electronics' long position.| BNK Financial vs. Samwha Electronics Co | BNK Financial vs. Seoul Electronics Telecom | BNK Financial vs. Inzi Display CoLtd | BNK Financial vs. Daesung Hi Tech Co |
| Sungmoon Electronics vs. Samsung Life Insurance | Sungmoon Electronics vs. Settlebank | Sungmoon Electronics vs. CKH Food Health | Sungmoon Electronics vs. BNK Financial Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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