Correlation Between DSC Investment and BNK Financial
Can any of the company-specific risk be diversified away by investing in both DSC Investment and BNK Financial 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 DSC Investment and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and BNK Financial Group, you can compare the effects of market volatilities on DSC Investment and BNK Financial 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 DSC Investment with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and BNK Financial.
Diversification Opportunities for DSC Investment and BNK Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DSC and BNK is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and BNK Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Financial Group and DSC Investment 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 DSC Investment are associated (or correlated) with BNK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Financial Group has no effect on the direction of DSC Investment i.e., DSC Investment and BNK Financial go up and down completely randomly.
Pair Corralation between DSC Investment and BNK Financial
Assuming the 90 days trading horizon DSC Investment is expected to generate 5.65 times more return on investment than BNK Financial. However, DSC Investment is 5.65 times more volatile than BNK Financial Group. It trades about 0.4 of its potential returns per unit of risk. BNK Financial Group is currently generating about 0.05 per unit of risk. If you would invest 280,500 in DSC Investment on November 22, 2024 and sell it today you would earn a total of 190,500 from holding DSC Investment or generate 67.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. BNK Financial Group
Performance |
| Timeline |
| DSC Investment |
| BNK Financial Group |
DSC Investment and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and BNK Financial
The main advantage of trading using opposite DSC Investment and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment position performs unexpectedly, BNK Financial 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 BNK Financial will offset losses from the drop in BNK Financial's long position.| DSC Investment vs. Namkwang Engineering Construction | DSC Investment vs. Hanshin Construction Co | DSC Investment vs. Hyundai Green Food | DSC Investment vs. Woorim Machinery Co |
| BNK Financial vs. NH Investment Securities | BNK Financial vs. SBI Investment KOREA | BNK Financial vs. Techwing | BNK Financial vs. Sangsangin Investment Securities |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |