Correlation Between BNK Financial and Automobile
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on BNK Financial and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Automobile.
Diversification Opportunities for BNK Financial and Automobile
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNK and Automobile is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of BNK Financial i.e., BNK Financial and Automobile go up and down completely randomly.
Pair Corralation between BNK Financial and Automobile
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.91 times more return on investment than Automobile. However, BNK Financial Group is 1.09 times less risky than Automobile. It trades about 0.14 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.18 per unit of risk. If you would invest 1,056,000 in BNK Financial Group on October 30, 2024 and sell it today you would earn a total of 135,000 from holding BNK Financial Group or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Automobile Pc
Performance |
| Timeline |
| BNK Financial Group |
| Automobile Pc |
BNK Financial and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Automobile
The main advantage of trading using opposite BNK Financial and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| BNK Financial vs. Koryo Credit Information | BNK Financial vs. YeaRimDang Publishing Co | BNK Financial vs. DataSolution | BNK Financial vs. Dongbang Transport Logistics |
| Automobile vs. Hana Materials | Automobile vs. Hyosung Advanced Materials | Automobile vs. INNOX Advanced Materials | Automobile vs. Chorokbaem Healthcare 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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