Correlation Between Bank of Georgia and ONEOK
Can any of the company-specific risk be diversified away by investing in both Bank of Georgia and ONEOK 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 Bank of Georgia and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Georgia and ONEOK Inc, you can compare the effects of market volatilities on Bank of Georgia and ONEOK 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 Bank of Georgia with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Georgia and ONEOK.
Diversification Opportunities for Bank of Georgia and ONEOK
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and ONEOK is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Georgia and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Bank of Georgia 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 Bank of Georgia are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Bank of Georgia i.e., Bank of Georgia and ONEOK go up and down completely randomly.
Pair Corralation between Bank of Georgia and ONEOK
Assuming the 90 days trading horizon Bank of Georgia is expected to generate 1.49 times more return on investment than ONEOK. However, Bank of Georgia is 1.49 times more volatile than ONEOK Inc. It trades about 0.08 of its potential returns per unit of risk. ONEOK Inc is currently generating about 0.08 per unit of risk. If you would invest 226,587 in Bank of Georgia on September 23, 2024 and sell it today you would earn a total of 241,413 from holding Bank of Georgia or generate 106.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.0% |
| Values | Daily Returns |
Bank of Georgia vs. ONEOK Inc
Performance |
| Timeline |
| Bank of Georgia |
| ONEOK Inc |
Bank of Georgia and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Georgia and ONEOK
The main advantage of trading using opposite Bank of Georgia and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Georgia position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| Bank of Georgia vs. Samsung Electronics Co | Bank of Georgia vs. Samsung Electronics Co | Bank of Georgia vs. Hyundai Motor | Bank of Georgia vs. Toyota Motor Corp |
| ONEOK vs. Uniper SE | ONEOK vs. Mulberry Group PLC | ONEOK vs. London Security Plc | ONEOK vs. Triad Group PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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