Correlation Between BNK Financial and Hana Financial
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Hana Financial 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 Hana Financial 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 Hana Financial, you can compare the effects of market volatilities on BNK Financial and Hana Financial 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 Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Hana Financial.
Diversification Opportunities for BNK Financial and Hana Financial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BNK and Hana is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial 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 Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of BNK Financial i.e., BNK Financial and Hana Financial go up and down completely randomly.
Pair Corralation between BNK Financial and Hana Financial
Assuming the 90 days trading horizon BNK Financial Group is expected to under-perform the Hana Financial. But the stock apears to be less risky and, when comparing its historical volatility, BNK Financial Group is 1.06 times less risky than Hana Financial. The stock trades about -0.19 of its potential returns per unit of risk. The Hana Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,050,000 in Hana Financial on November 28, 2024 and sell it today you would earn a total of 150,000 from holding Hana Financial or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Hana Financial
Performance |
| Timeline |
| BNK Financial Group |
| Hana Financial |
BNK Financial and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Hana Financial
The main advantage of trading using opposite BNK Financial and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Hana Financial 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 Hana Financial will offset losses from the drop in Hana Financial'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 |
| Hana Financial vs. System and Application | Hana Financial vs. Insung Information Co | Hana Financial vs. Daishin Information Communications | Hana Financial vs. Daejung Chemicals Metals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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