Correlation Between BGF Retail and Korea New
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Korea New 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 New 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 New Network, you can compare the effects of market volatilities on BGF Retail and Korea New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Korea New.
Diversification Opportunities for BGF Retail and Korea New
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BGF and Korea is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of BGF Retail i.e., BGF Retail and Korea New go up and down completely randomly.
Pair Corralation between BGF Retail and Korea New
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Korea New. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.45 times less risky than Korea New. The stock trades about -0.12 of its potential returns per unit of risk. The Korea New Network is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 74,300 in Korea New Network on September 13, 2024 and sell it today you would earn a total of 16,300 from holding Korea New Network or generate 21.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Korea New Network
Performance |
| Timeline |
| BGF Retail |
| Korea New Network |
BGF Retail and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Korea New
The main advantage of trading using opposite BGF Retail and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Korea New 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 New will offset losses from the drop in Korea New's long position.| BGF Retail vs. Korea New Network | BGF Retail vs. ICD Co | BGF Retail vs. DYPNF CoLtd | BGF Retail vs. Solution Advanced Technology |
| Korea New vs. CJ Seafood Corp | Korea New vs. FoodNamoo | Korea New vs. FOODWELL Co | Korea New vs. Hankukpackage 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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