Correlation Between BGF Retail and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on BGF Retail and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Korea Alcohol.
Diversification Opportunities for BGF Retail and Korea Alcohol
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BGF and Korea is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of BGF Retail i.e., BGF Retail and Korea Alcohol go up and down completely randomly.
Pair Corralation between BGF Retail and Korea Alcohol
Assuming the 90 days trading horizon BGF Retail Co is expected to generate 1.34 times more return on investment than Korea Alcohol. However, BGF Retail is 1.34 times more volatile than Korea Alcohol Industrial. It trades about -0.04 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.07 per unit of risk. If you would invest 13,690,000 in BGF Retail Co on August 27, 2024 and sell it today you would lose (2,890,000) from holding BGF Retail Co or give up 21.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| BGF Retail |
| Korea Alcohol Industrial |
BGF Retail and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Korea Alcohol
The main advantage of trading using opposite BGF Retail and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail vs. Microfriend |
| Korea Alcohol vs. LG Chemicals | Korea Alcohol vs. Lotte Chemical Corp | Korea Alcohol vs. Hyundai Steel | Korea Alcohol vs. Seah Steel Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| CEOs Directory Screen CEOs from public companies around the world |