Correlation Between BNK Financial and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both BNK Financial and Golden Bridge 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 Financial and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNK Financial Group and Golden Bridge Investment, you can compare the effects of market volatilities on BNK Financial and Golden Bridge 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 Financial with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNK Financial and Golden Bridge.
Diversification Opportunities for BNK Financial and Golden Bridge
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNK and Golden is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BNK Financial Group and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and BNK Financial 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 Financial Group are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of BNK Financial i.e., BNK Financial and Golden Bridge go up and down completely randomly.
Pair Corralation between BNK Financial and Golden Bridge
Assuming the 90 days trading horizon BNK Financial Group is expected to generate 1.38 times more return on investment than Golden Bridge. However, BNK Financial is 1.38 times more volatile than Golden Bridge Investment. It trades about 0.11 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.18 per unit of risk. If you would invest 735,705 in BNK Financial Group on October 9, 2024 and sell it today you would earn a total of 304,295 from holding BNK Financial Group or generate 41.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BNK Financial Group vs. Golden Bridge Investment
Performance |
Timeline |
BNK Financial Group |
Golden Bridge Investment |
BNK Financial and Golden Bridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BNK Financial and Golden Bridge
The main advantage of trading using opposite BNK Financial and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNK Financial position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.BNK Financial vs. Green Cross Medical | BNK Financial vs. Samyang Foods Co | BNK Financial vs. Samlip General Foods | BNK Financial vs. Korea Investment Holdings |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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