Correlation Between BGF Retail and Korea Gas
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Korea Gas 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 Gas 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 Gas, you can compare the effects of market volatilities on BGF Retail and Korea Gas 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 Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Korea Gas.
Diversification Opportunities for BGF Retail and Korea Gas
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BGF and Korea is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Korea Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Gas 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 Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Gas has no effect on the direction of BGF Retail i.e., BGF Retail and Korea Gas go up and down completely randomly.
Pair Corralation between BGF Retail and Korea Gas
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Korea Gas. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.47 times less risky than Korea Gas. The stock trades about -0.08 of its potential returns per unit of risk. The Korea Gas is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,095,000 in Korea Gas on August 28, 2024 and sell it today you would earn a total of 670,000 from holding Korea Gas or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BGF Retail Co vs. Korea Gas
Performance |
| Timeline |
| BGF Retail |
| Korea Gas |
BGF Retail and Korea Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Korea Gas
The main advantage of trading using opposite BGF Retail and Korea Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Korea Gas 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 Gas will offset losses from the drop in Korea Gas' long position.| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail vs. Microfriend |
| Korea Gas vs. Daeduck Electronics Co | Korea Gas vs. Seoul Electronics Telecom | Korea Gas vs. Shinil Electronics Co | Korea Gas vs. ABCO Electronics 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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