Correlation Between BNK Financial and Green Cross
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Green Cross 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 Green Cross 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 Green Cross Medical, you can compare the effects of market volatilities on BNK Financial and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Green Cross.
Diversification Opportunities for BNK Financial and Green Cross
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BNK and Green is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of BNK Financial i.e., BNK Financial and Green Cross go up and down completely randomly.
Pair Corralation between BNK Financial and Green Cross
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.75 times more return on investment than Green Cross. However, BNK Financial Group is 1.34 times less risky than Green Cross. It trades about 0.43 of its potential returns per unit of risk. Green Cross Medical is currently generating about -0.33 per unit of risk. If you would invest 940,000 in BNK Financial Group on September 4, 2024 and sell it today you would earn a total of 152,000 from holding BNK Financial Group or generate 16.17% 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. Green Cross Medical
Performance |
| Timeline |
| BNK Financial Group |
| Green Cross Medical |
BNK Financial and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Green Cross
The main advantage of trading using opposite BNK Financial and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| BNK Financial vs. Dongjin Semichem Co | BNK Financial vs. AhnLab Inc | BNK Financial vs. Posco ICT | BNK Financial vs. CJ ENM |
| Green Cross vs. AptaBio Therapeutics | Green Cross vs. KT Hitel | Green Cross vs. SillaJen | Green Cross vs. Cytogen |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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