Correlation Between BNK Financial and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Digital Imaging 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 Digital Imaging 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 Digital Imaging Technology, you can compare the effects of market volatilities on BNK Financial and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Digital Imaging.
Diversification Opportunities for BNK Financial and Digital Imaging
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNK and Digital is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of BNK Financial i.e., BNK Financial and Digital Imaging go up and down completely randomly.
Pair Corralation between BNK Financial and Digital Imaging
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.56 times more return on investment than Digital Imaging. However, BNK Financial Group is 1.79 times less risky than Digital Imaging. It trades about 0.29 of its potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.03 per unit of risk. If you would invest 949,000 in BNK Financial Group on September 13, 2024 and sell it today you would earn a total of 164,000 from holding BNK Financial Group or generate 17.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Digital Imaging Technology
Performance |
| Timeline |
| BNK Financial Group |
| Digital Imaging Tech |
BNK Financial and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Digital Imaging
The main advantage of trading using opposite BNK Financial and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.| BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group | BNK Financial vs. Hana Financial | BNK Financial vs. Woori Financial Group |
| Digital Imaging vs. SK Hynix | Digital Imaging vs. People Technology | Digital Imaging vs. Hana Materials | Digital Imaging vs. SIMMTECH 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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