Correlation Between Bosung Power and Itcen
Can any of the company-specific risk be diversified away by investing in both Bosung Power and Itcen 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 Itcen 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 Itcen Co, you can compare the effects of market volatilities on Bosung Power and Itcen 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 Itcen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and Itcen.
Diversification Opportunities for Bosung Power and Itcen
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bosung and Itcen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen 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 Itcen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen has no effect on the direction of Bosung Power i.e., Bosung Power and Itcen go up and down completely randomly.
Pair Corralation between Bosung Power and Itcen
Assuming the 90 days trading horizon Bosung Power Technology is expected to generate 0.58 times more return on investment than Itcen. However, Bosung Power Technology is 1.74 times less risky than Itcen. It trades about 0.18 of its potential returns per unit of risk. Itcen Co is currently generating about -0.12 per unit of risk. If you would invest 255,500 in Bosung Power Technology on October 17, 2024 and sell it today you would earn a total of 19,000 from holding Bosung Power Technology or generate 7.44% 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. Itcen Co
Performance |
| Timeline |
| Bosung Power Technology |
| Itcen |
Bosung Power and Itcen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosung Power and Itcen
The main advantage of trading using opposite Bosung Power and Itcen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power position performs unexpectedly, Itcen 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 Itcen will offset losses from the drop in Itcen's long position.| Bosung Power vs. Raontech | Bosung Power vs. Hansol Homedeco Co | Bosung Power vs. Narae Nanotech Corp | Bosung Power vs. Eagle Veterinary Technology |
| Itcen vs. KMH Hitech Co | Itcen vs. GemVaxKAEL CoLtd | Itcen vs. Bosung Power Technology | Itcen 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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