Correlation Between BNK Financial and Korea Information
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on BNK Financial and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Korea Information.
Diversification Opportunities for BNK Financial and Korea Information
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between BNK and Korea is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of BNK Financial i.e., BNK Financial and Korea Information go up and down completely randomly.
Pair Corralation between BNK Financial and Korea Information
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 1.94 times more return on investment than Korea Information. However, BNK Financial is 1.94 times more volatile than Korea Information Communications. It trades about 0.56 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.09 per unit of risk. If you would invest 1,040,000 in BNK Financial Group on November 6, 2024 and sell it today you would earn a total of 167,000 from holding BNK Financial Group or generate 16.06% 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 Information Communicatio
Performance |
| Timeline |
| BNK Financial Group |
| Korea Information |
BNK Financial and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Korea Information
The main advantage of trading using opposite BNK Financial and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| BNK Financial vs. CKH Food Health | BNK Financial vs. Daejoo Electronic Materials | BNK Financial vs. Top Material Co | BNK Financial vs. Solus Advanced Materials |
| Korea Information vs. Insung Information Co | Korea Information vs. LAKE MATERIALS LTD | Korea Information vs. RF Materials Co | Korea Information vs. Lake Materials 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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