Correlation Between BNK Financial and Total Soft
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Total Soft 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 Total Soft 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 Total Soft Bank, you can compare the effects of market volatilities on BNK Financial and Total Soft 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 Total Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Total Soft.
Diversification Opportunities for BNK Financial and Total Soft
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNK and Total is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Total Soft Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Soft Bank 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 Total Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Soft Bank has no effect on the direction of BNK Financial i.e., BNK Financial and Total Soft go up and down completely randomly.
Pair Corralation between BNK Financial and Total Soft
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.48 times more return on investment than Total Soft. However, BNK Financial Group is 2.08 times less risky than Total Soft. It trades about 0.08 of its potential returns per unit of risk. Total Soft Bank is currently generating about 0.02 per unit of risk. If you would invest 611,173 in BNK Financial Group on August 30, 2024 and sell it today you would earn a total of 417,827 from holding BNK Financial Group or generate 68.36% 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. Total Soft Bank
Performance |
| Timeline |
| BNK Financial Group |
| Total Soft Bank |
BNK Financial and Total Soft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Total Soft
The main advantage of trading using opposite BNK Financial and Total Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Total Soft 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 Total Soft will offset losses from the drop in Total Soft's long position.| BNK Financial vs. Cube Entertainment | BNK Financial vs. Dreamus Company | BNK Financial vs. LG Energy Solution | BNK Financial vs. Dongwon System |
| Total Soft vs. Lotte Energy Materials | Total Soft vs. EV Advanced Material | Total Soft vs. TOPMATERIAL LTD | Total Soft vs. Inzi Display CoLtd |
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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