Correlation Between BNK Financial and Lotte Data
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Lotte Data 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 Lotte Data 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 Lotte Data Communication, you can compare the effects of market volatilities on BNK Financial and Lotte Data 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 Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Lotte Data.
Diversification Opportunities for BNK Financial and Lotte Data
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BNK and Lotte is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication 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 Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of BNK Financial i.e., BNK Financial and Lotte Data go up and down completely randomly.
Pair Corralation between BNK Financial and Lotte Data
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 1.07 times more return on investment than Lotte Data. However, BNK Financial is 1.07 times more volatile than Lotte Data Communication. It trades about 0.06 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.1 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Financial Group vs. Lotte Data Communication
Performance |
| Timeline |
| BNK Financial Group |
| Lotte Data Communication |
BNK Financial and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and Lotte Data
The main advantage of trading using opposite BNK Financial and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Lotte Data 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 Lotte Data will offset losses from the drop in Lotte Data'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 |
| Lotte Data vs. Lotte Chilsung Beverage | Lotte Data vs. Sejong Telecom | Lotte Data vs. SK Telecom Co | Lotte Data vs. Korea Information Communications |
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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