Correlation Between INNOX Advanced and BNK Financial
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced 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 INNOX Advanced and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and BNK Financial Group, you can compare the effects of market volatilities on INNOX Advanced 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 INNOX Advanced with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and BNK Financial.
Diversification Opportunities for INNOX Advanced and BNK Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INNOX and BNK is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials 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 INNOX Advanced 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 INNOX Advanced Materials 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 INNOX Advanced i.e., INNOX Advanced and BNK Financial go up and down completely randomly.
Pair Corralation between INNOX Advanced and BNK Financial
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to under-perform the BNK Financial. In addition to that, INNOX Advanced is 1.2 times more volatile than BNK Financial Group. It trades about -0.17 of its total potential returns per unit of risk. BNK Financial Group is currently generating about 0.11 per unit of volatility. If you would invest 821,912 in BNK Financial Group on September 27, 2024 and sell it today you would earn a total of 251,088 from holding BNK Financial Group or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. BNK Financial Group
Performance |
| Timeline |
| INNOX Advanced Materials |
| BNK Financial Group |
INNOX Advanced and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and BNK Financial
The main advantage of trading using opposite INNOX Advanced and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced 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.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. Tokai Carbon Korea | INNOX Advanced vs. People Technology |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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