Correlation Between BGF Retail and Hyundai BNG
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Hyundai BNG 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 BGF Retail and Hyundai BNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Hyundai BNG Steel, you can compare the effects of market volatilities on BGF Retail and Hyundai BNG 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 BGF Retail with a short position of Hyundai BNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Hyundai BNG.
Diversification Opportunities for BGF Retail and Hyundai BNG
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BGF and Hyundai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Hyundai BNG Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai BNG Steel and BGF Retail 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 BGF Retail Co are associated (or correlated) with Hyundai BNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai BNG Steel has no effect on the direction of BGF Retail i.e., BGF Retail and Hyundai BNG go up and down completely randomly.
Pair Corralation between BGF Retail and Hyundai BNG
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Hyundai BNG. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.23 times less risky than Hyundai BNG. The stock trades about -0.07 of its potential returns per unit of risk. The Hyundai BNG Steel is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,165,000 in Hyundai BNG Steel on October 24, 2024 and sell it today you would earn a total of 129,000 from holding Hyundai BNG Steel or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Hyundai BNG Steel
Performance |
| Timeline |
| BGF Retail |
| Hyundai BNG Steel |
BGF Retail and Hyundai BNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Hyundai BNG
The main advantage of trading using opposite BGF Retail and Hyundai BNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Hyundai BNG 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 Hyundai BNG will offset losses from the drop in Hyundai BNG's long position.| BGF Retail vs. Lotte Non Life Insurance | BGF Retail vs. Asiana Airlines | BGF Retail vs. Korean Reinsurance Co | BGF Retail vs. Moadata Co |
| Hyundai BNG vs. AptaBio Therapeutics | Hyundai BNG vs. Daewoo SBI SPAC | Hyundai BNG vs. Dream Security co | Hyundai BNG vs. Microfriend |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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