Correlation Between BNK Financial and BBC
Can any of the company-specific risk be diversified away by investing in both BNK Financial and BBC 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 BBC 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 BBC Co, you can compare the effects of market volatilities on BNK Financial and BBC 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 BBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and BBC.
Diversification Opportunities for BNK Financial and BBC
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BNK and BBC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and BBC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBC Co 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 BBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBC Co has no effect on the direction of BNK Financial i.e., BNK Financial and BBC go up and down completely randomly.
Pair Corralation between BNK Financial and BBC
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 1.35 times more return on investment than BBC. However, BNK Financial is 1.35 times more volatile than BBC Co. It trades about 0.37 of its potential returns per unit of risk. BBC Co is currently generating about 0.05 per unit of risk. If you would invest 1,049,000 in BNK Financial Group on November 8, 2024 and sell it today you would earn a total of 127,000 from holding BNK Financial Group or generate 12.11% 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. BBC Co
Performance |
| Timeline |
| BNK Financial Group |
| BBC Co |
BNK Financial and BBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Financial and BBC
The main advantage of trading using opposite BNK Financial and BBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, BBC 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 BBC will offset losses from the drop in BBC's long position.| BNK Financial vs. Ssangyong Information Communication | BNK Financial vs. Daejung Chemicals Metals | BNK Financial vs. Hanjin Transportation Co | BNK Financial vs. Digital Power Communications |
| BBC vs. Narae Nanotech Corp | BBC vs. V One Tech Co | BBC vs. KB Financial Group | BBC vs. Korean Reinsurance 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets |