Correlation Between BNK Banking and MA Financial
Can any of the company-specific risk be diversified away by investing in both BNK Banking and MA Financial 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 BNK Banking and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNK Banking and MA Financial Group, you can compare the effects of market volatilities on BNK Banking and MA Financial 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 BNK Banking with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Banking and MA Financial.
Diversification Opportunities for BNK Banking and MA Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNK and MAF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BNK Banking and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group and BNK Banking 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 BNK Banking are associated (or correlated) with MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of BNK Banking i.e., BNK Banking and MA Financial go up and down completely randomly.
Pair Corralation between BNK Banking and MA Financial
Assuming the 90 days trading horizon BNK Banking is expected to under-perform the MA Financial. In addition to that, BNK Banking is 1.39 times more volatile than MA Financial Group. It trades about -0.05 of its total potential returns per unit of risk. MA Financial Group is currently generating about 0.05 per unit of volatility. If you would invest 521.00 in MA Financial Group on January 7, 2025 and sell it today you would earn a total of 71.00 from holding MA Financial Group or generate 13.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNK Banking vs. MA Financial Group
Performance |
| Timeline |
| BNK Banking |
| MA Financial Group |
BNK Banking and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNK Banking and MA Financial
The main advantage of trading using opposite BNK Banking and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Banking position performs unexpectedly, MA Financial 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 MA Financial will offset losses from the drop in MA Financial's long position.| BNK Banking vs. Australian United Investment | BNK Banking vs. Platinum Asset Management | BNK Banking vs. SportsHero | BNK Banking vs. Kip McGrath Education |
| MA Financial vs. Champion Iron | MA Financial vs. SportsHero | MA Financial vs. Health and Plant | MA Financial vs. Tombador Iron |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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