Correlation Between Busan Ind and Insung Information
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Insung Information 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 Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Insung Information Co, you can compare the effects of market volatilities on Busan Ind and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Insung Information.
Diversification Opportunities for Busan Ind and Insung Information
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Busan and Insung is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Busan Ind i.e., Busan Ind and Insung Information go up and down completely randomly.
Pair Corralation between Busan Ind and Insung Information
Assuming the 90 days trading horizon Busan Ind is expected to generate 3.15 times more return on investment than Insung Information. However, Busan Ind is 3.15 times more volatile than Insung Information Co. It trades about 0.14 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.18 per unit of risk. If you would invest 6,220,000 in Busan Ind on August 30, 2024 and sell it today you would earn a total of 1,160,000 from holding Busan Ind or generate 18.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Insung Information Co
Performance |
| Timeline |
| Busan Ind |
| Insung Information |
Busan Ind and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Insung Information
The main advantage of trading using opposite Busan Ind and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Busan Ind vs. Sangshin Electronics Co | Busan Ind vs. SungMoon Electronics Co | Busan Ind vs. ABCO Electronics Co | Busan Ind vs. Okins Electronics Co |
| Insung Information vs. Daou Data Corp | Insung Information vs. Busan Industrial Co | Insung Information vs. Busan Ind | Insung Information vs. Shinhan WTI Futures |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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