Correlation Between Busan Ind and Mobase Electronics
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Mobase Electronics 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 Mobase Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Mobase Electronics CoLtd, you can compare the effects of market volatilities on Busan Ind and Mobase Electronics 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 Mobase Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Mobase Electronics.
Diversification Opportunities for Busan Ind and Mobase Electronics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Mobase is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Mobase Electronics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobase Electronics CoLtd 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 Mobase Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobase Electronics CoLtd has no effect on the direction of Busan Ind i.e., Busan Ind and Mobase Electronics go up and down completely randomly.
Pair Corralation between Busan Ind and Mobase Electronics
Assuming the 90 days trading horizon Busan Ind is expected to under-perform the Mobase Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Busan Ind is 1.19 times less risky than Mobase Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Mobase Electronics CoLtd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 145,593 in Mobase Electronics CoLtd on September 1, 2024 and sell it today you would earn a total of 11,807 from holding Mobase Electronics CoLtd or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Mobase Electronics CoLtd
Performance |
| Timeline |
| Busan Ind |
| Mobase Electronics CoLtd |
Busan Ind and Mobase Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Mobase Electronics
The main advantage of trading using opposite Busan Ind and Mobase Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Mobase Electronics 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 Mobase Electronics will offset losses from the drop in Mobase Electronics' long position.| Busan Ind vs. ABCO Electronics Co | Busan Ind vs. KG Eco Technology | Busan Ind vs. PJ Electronics Co | Busan Ind vs. DAEDUCK ELECTRONICS CoLtd |
| Mobase Electronics vs. LG Display | Mobase Electronics vs. Hyundai Motor | Mobase Electronics vs. Hyundai Motor Co | Mobase Electronics vs. Hyundai Motor 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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