Correlation Between BGF Retail and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both BGF Retail and SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment Co, you can compare the effects of market volatilities on BGF Retail and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and SKONEC Entertainment.
Diversification Opportunities for BGF Retail and SKONEC Entertainment
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BGF and SKONEC is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of BGF Retail i.e., BGF Retail and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between BGF Retail and SKONEC Entertainment
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the SKONEC Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 2.61 times less risky than SKONEC Entertainment. The stock trades about 0.0 of its potential returns per unit of risk. The SKONEC Entertainment Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 308,500 in SKONEC Entertainment Co on October 16, 2024 and sell it today you would earn a total of 92,000 from holding SKONEC Entertainment Co or generate 29.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. SKONEC Entertainment Co
Performance |
| Timeline |
| BGF Retail |
| SKONEC Entertainment |
BGF Retail and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and SKONEC Entertainment
The main advantage of trading using opposite BGF Retail and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| BGF Retail vs. Korea Steel Co | BGF Retail vs. INSUN Environmental New | BGF Retail vs. Han Kook Steel | BGF Retail vs. Korea Information Communications |
| SKONEC Entertainment vs. Korean Air Lines | SKONEC Entertainment vs. Haitai Confectionery Foods | SKONEC Entertainment vs. Sempio Foods Co | SKONEC Entertainment vs. BGF Retail 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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