Correlation Between Busan Ind and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Eagon Industrial 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 Eagon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Eagon Industrial Co, you can compare the effects of market volatilities on Busan Ind and Eagon Industrial 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 Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Eagon Industrial.
Diversification Opportunities for Busan Ind and Eagon Industrial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Busan and Eagon is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial 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 Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Busan Ind i.e., Busan Ind and Eagon Industrial go up and down completely randomly.
Pair Corralation between Busan Ind and Eagon Industrial
Assuming the 90 days trading horizon Busan Ind is expected to generate 4.97 times more return on investment than Eagon Industrial. However, Busan Ind is 4.97 times more volatile than Eagon Industrial Co. It trades about 0.23 of its potential returns per unit of risk. Eagon Industrial Co is currently generating about 0.12 per unit of risk. If you would invest 5,500,000 in Busan Ind on September 23, 2024 and sell it today you would earn a total of 2,360,000 from holding Busan Ind or generate 42.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Eagon Industrial Co
Performance |
| Timeline |
| Busan Ind |
| Eagon Industrial |
Busan Ind and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Eagon Industrial
The main advantage of trading using opposite Busan Ind and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Busan Ind vs. Samsung Electronics Co | Busan Ind vs. Samsung Electronics Co | Busan Ind vs. LG Energy Solution | Busan Ind vs. SK Hynix |
| Eagon Industrial vs. AptaBio Therapeutics | Eagon Industrial vs. Wonbang Tech Co | Eagon Industrial vs. Busan Industrial Co | Eagon Industrial vs. Busan Ind |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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