Correlation Between BNK Financial and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on BNK Financial and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Hansol Homedeco.
Diversification Opportunities for BNK Financial and Hansol Homedeco
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNK and Hansol is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of BNK Financial i.e., BNK Financial and Hansol Homedeco go up and down completely randomly.
Pair Corralation between BNK Financial and Hansol Homedeco
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.66 times more return on investment than Hansol Homedeco. However, BNK Financial Group is 1.51 times less risky than Hansol Homedeco. It trades about 0.11 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about 0.02 per unit of risk. If you would invest 653,035 in BNK Financial Group on November 28, 2024 and sell it today you would earn a total of 513,965 from holding BNK Financial Group or generate 78.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Hansol Homedeco Co
Performance |
| Timeline |
| BNK Financial Group |
| Hansol Homedeco |
BNK Financial and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Hansol Homedeco
The main advantage of trading using opposite BNK Financial and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| BNK Financial vs. Korean Drug Co | BNK Financial vs. Sam Yang Foods | BNK Financial vs. Green Cross Medical | BNK Financial vs. DB Insurance Co |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Daewoo SBI SPAC | Hansol Homedeco vs. Dream Security co | Hansol Homedeco 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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