Correlation Between Busan Ind and Sam Chun
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Sam Chun 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 Busan Ind and Sam Chun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Sam Chun Dang, you can compare the effects of market volatilities on Busan Ind and Sam Chun 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 Busan Ind with a short position of Sam Chun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Sam Chun.
Diversification Opportunities for Busan Ind and Sam Chun
Very good diversification
The 3 months correlation between Busan and Sam is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang and Busan Ind 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 Busan Ind are associated (or correlated) with Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Busan Ind i.e., Busan Ind and Sam Chun go up and down completely randomly.
Pair Corralation between Busan Ind and Sam Chun
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.28 times more return on investment than Sam Chun. However, Busan Ind is 1.28 times more volatile than Sam Chun Dang. It trades about 0.09 of its potential returns per unit of risk. Sam Chun Dang is currently generating about -0.23 per unit of risk. If you would invest 5,280,000 in Busan Ind on August 29, 2024 and sell it today you would earn a total of 400,000 from holding Busan Ind or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Sam Chun Dang
Performance |
| Timeline |
| Busan Ind |
| Sam Chun Dang |
Busan Ind and Sam Chun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Sam Chun
The main advantage of trading using opposite Busan Ind and Sam Chun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Sam Chun 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 Sam Chun will offset losses from the drop in Sam Chun's long position.| Busan Ind vs. NICE Information Service | Busan Ind vs. Daiyang Metal Co | Busan Ind vs. Nice Information Telecommunication | Busan Ind vs. Daou Data Corp |
| Sam Chun vs. Medy Tox | Sam Chun vs. Busan Industrial Co | Sam Chun vs. Busan Ind | Sam Chun vs. Mirae Asset Daewoo |
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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