Correlation Between Coronado Global and BNK Banking
Can any of the company-specific risk be diversified away by investing in both Coronado Global and BNK Banking 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 Coronado Global and BNK Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coronado Global Resources and BNK Banking, you can compare the effects of market volatilities on Coronado Global and BNK Banking 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 Coronado Global with a short position of BNK Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronado Global and BNK Banking.
Diversification Opportunities for Coronado Global and BNK Banking
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coronado and BNK is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Coronado Global Resources and BNK Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Banking and Coronado Global 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 Coronado Global Resources are associated (or correlated) with BNK Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Banking has no effect on the direction of Coronado Global i.e., Coronado Global and BNK Banking go up and down completely randomly.
Pair Corralation between Coronado Global and BNK Banking
Assuming the 90 days trading horizon Coronado Global Resources is expected to under-perform the BNK Banking. But the stock apears to be less risky and, when comparing its historical volatility, Coronado Global Resources is 1.27 times less risky than BNK Banking. The stock trades about -0.06 of its potential returns per unit of risk. The BNK Banking is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 48.00 in BNK Banking on October 23, 2024 and sell it today you would lose (18.00) from holding BNK Banking or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coronado Global Resources vs. BNK Banking
Performance |
| Timeline |
| Coronado Global Resources |
| BNK Banking |
Coronado Global and BNK Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coronado Global and BNK Banking
The main advantage of trading using opposite Coronado Global and BNK Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronado Global position performs unexpectedly, BNK Banking 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 BNK Banking will offset losses from the drop in BNK Banking's long position.| Coronado Global vs. A1 Investments Resources | Coronado Global vs. Sequoia Financial Group | Coronado Global vs. Navigator Global Investments | Coronado Global vs. Liberty Financial Group |
| BNK Banking vs. Energy Resources | BNK Banking vs. 88 Energy | BNK Banking vs. A1 Investments Resources | BNK Banking vs. Coronado Global Resources |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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