Correlation Between BNK Financial and NICE Information
Can any of the company-specific risk be diversified away by investing in both BNK Financial and NICE 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 NICE 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 NICE Information Service, you can compare the effects of market volatilities on BNK Financial and NICE 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 NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and NICE Information.
Diversification Opportunities for BNK Financial and NICE Information
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNK and NICE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and NICE Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE Information Service 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 NICE Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE Information Service has no effect on the direction of BNK Financial i.e., BNK Financial and NICE Information go up and down completely randomly.
Pair Corralation between BNK Financial and NICE Information
Assuming the 90 days trading horizon BNK Financial is expected to generate 1.78 times less return on investment than NICE Information. In addition to that, BNK Financial is 1.43 times more volatile than NICE Information Service. It trades about 0.06 of its total potential returns per unit of risk. NICE Information Service is currently generating about 0.16 per unit of volatility. If you would invest 1,164,000 in NICE Information Service on September 24, 2024 and sell it today you would earn a total of 75,000 from holding NICE Information Service or generate 6.44% 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. NICE Information Service
Performance |
| Timeline |
| BNK Financial Group |
| NICE Information Service |
BNK Financial and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and NICE Information
The main advantage of trading using opposite BNK Financial and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, NICE 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 NICE Information will offset losses from the drop in NICE Information's long position.| BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group | BNK Financial vs. Hyundai Motor | BNK Financial vs. Hyundai Motor Co |
| NICE Information vs. InfoBank | NICE Information vs. Samyang Foods Co | NICE Information vs. Lotte Chilsung Beverage | NICE Information vs. Samlip General Foods |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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