Correlation Between Bosung Power and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Bosung Power and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Bosung Power and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and Incar Financial.
Diversification Opportunities for Bosung Power and Incar Financial
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bosung and Incar is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Bosung Power i.e., Bosung Power and Incar Financial go up and down completely randomly.
Pair Corralation between Bosung Power and Incar Financial
Assuming the 90 days trading horizon Bosung Power Technology is expected to generate 1.23 times more return on investment than Incar Financial. However, Bosung Power is 1.23 times more volatile than Incar Financial Service. It trades about 0.07 of its potential returns per unit of risk. Incar Financial Service is currently generating about -0.06 per unit of risk. If you would invest 289,000 in Bosung Power Technology on October 30, 2024 and sell it today you would earn a total of 20,000 from holding Bosung Power Technology or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosung Power Technology vs. Incar Financial Service
Performance |
| Timeline |
| Bosung Power Technology |
| Incar Financial Service |
Bosung Power and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosung Power and Incar Financial
The main advantage of trading using opposite Bosung Power and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Bosung Power vs. TJ media Co | Bosung Power vs. SKONEC Entertainment Co | Bosung Power vs. Samlip General Foods | Bosung Power vs. MEDIANA CoLtd |
| Incar Financial vs. Daechang Steel Co | Incar Financial vs. Iljin Display | Incar Financial vs. Finebesteel | Incar Financial vs. Digital Power Communications |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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