Correlation Between Busan Ind and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Sam Yang 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 Yang 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 Yang Foods, you can compare the effects of market volatilities on Busan Ind and Sam Yang 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 Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Sam Yang.
Diversification Opportunities for Busan Ind and Sam Yang
Very poor diversification
The 3 months correlation between Busan and Sam is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods 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 Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Busan Ind i.e., Busan Ind and Sam Yang go up and down completely randomly.
Pair Corralation between Busan Ind and Sam Yang
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.19 times more return on investment than Sam Yang. However, Busan Ind is 1.19 times more volatile than Sam Yang Foods. It trades about 0.03 of its potential returns per unit of risk. Sam Yang Foods is currently generating about -0.19 per unit of risk. If you would invest 7,650,000 in Busan Ind on November 6, 2024 and sell it today you would earn a total of 50,000 from holding Busan Ind or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Sam Yang Foods
Performance |
| Timeline |
| Busan Ind |
| Sam Yang Foods |
Busan Ind and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Sam Yang
The main advantage of trading using opposite Busan Ind and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Sam Yang 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 Yang will offset losses from the drop in Sam Yang's long position.| Busan Ind vs. Sempio Foods Co | Busan Ind vs. Sung Bo Chemicals | Busan Ind vs. Kukdo Chemical Co | Busan Ind vs. Lotte Fine Chemical |
| Sam Yang vs. Hyosung Advanced Materials | Sam Yang vs. InnoTherapy | Sam Yang vs. INNOX Advanced Materials | Sam Yang vs. Infinitt Healthcare 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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