Correlation Between Busan Ind and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Ilji Technology 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 Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Ilji Technology Co, you can compare the effects of market volatilities on Busan Ind and Ilji Technology 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 Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Ilji Technology.
Diversification Opportunities for Busan Ind and Ilji Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Ilji is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology 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 Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of Busan Ind i.e., Busan Ind and Ilji Technology go up and down completely randomly.
Pair Corralation between Busan Ind and Ilji Technology
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.74 times more return on investment than Ilji Technology. However, Busan Ind is 1.74 times more volatile than Ilji Technology Co. It trades about 0.06 of its potential returns per unit of risk. Ilji Technology Co is currently generating about -0.08 per unit of risk. If you would invest 5,150,000 in Busan Ind on August 28, 2024 and sell it today you would earn a total of 530,000 from holding Busan Ind or generate 10.29% 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. Ilji Technology Co
Performance |
| Timeline |
| Busan Ind |
| Ilji Technology |
Busan Ind and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Ilji Technology
The main advantage of trading using opposite Busan Ind and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology'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 |
| Ilji Technology vs. Ssangyong Information Communication | Ilji Technology vs. Daishin Information Communications | Ilji Technology vs. FNSTech Co | Ilji Technology vs. GS Retail 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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