Correlation Between BNK Financial and Settlebank
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on BNK Financial and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Settlebank.
Diversification Opportunities for BNK Financial and Settlebank
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BNK and Settlebank is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of BNK Financial i.e., BNK Financial and Settlebank go up and down completely randomly.
Pair Corralation between BNK Financial and Settlebank
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 0.79 times more return on investment than Settlebank. However, BNK Financial Group is 1.27 times less risky than Settlebank. It trades about 0.06 of its potential returns per unit of risk. Settlebank is currently generating about -0.08 per unit of risk. If you would invest 996,000 in BNK Financial Group on September 24, 2024 and sell it today you would earn a total of 30,000 from holding BNK Financial Group or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Settlebank
Performance |
| Timeline |
| BNK Financial Group |
| Settlebank |
BNK Financial and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Settlebank
The main advantage of trading using opposite BNK Financial and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank'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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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