Correlation Between Bosung Power and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both Bosung Power and ABOV Semiconductor 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 Bosung Power and ABOV Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bosung Power Technology and ABOV Semiconductor Co, you can compare the effects of market volatilities on Bosung Power and ABOV Semiconductor 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 Bosung Power with a short position of ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and ABOV Semiconductor.
Diversification Opportunities for Bosung Power and ABOV Semiconductor
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bosung and ABOV is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor and Bosung Power 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 Bosung Power Technology are associated (or correlated) with ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of Bosung Power i.e., Bosung Power and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between Bosung Power and ABOV Semiconductor
Assuming the 90 days trading horizon Bosung Power is expected to generate 1.79 times less return on investment than ABOV Semiconductor. But when comparing it to its historical volatility, Bosung Power Technology is 1.39 times less risky than ABOV Semiconductor. It trades about 0.2 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 750,000 in ABOV Semiconductor Co on October 12, 2024 and sell it today you would earn a total of 107,000 from holding ABOV Semiconductor Co or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosung Power Technology vs. ABOV Semiconductor Co
Performance |
| Timeline |
| Bosung Power Technology |
| ABOV Semiconductor |
Bosung Power and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosung Power and ABOV Semiconductor
The main advantage of trading using opposite Bosung Power and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| Bosung Power vs. Iljin Display | Bosung Power vs. Lotte Data Communication | Bosung Power vs. Nice Information Telecommunication | Bosung Power vs. SCI Information Service |
| ABOV Semiconductor vs. KMH Hitech Co | ABOV Semiconductor vs. GemVaxKAEL CoLtd | ABOV Semiconductor vs. Bosung Power Technology | ABOV Semiconductor vs. Busan Industrial 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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