Correlation Between Busan Ind and Jahwa Electron
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Jahwa Electron 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 Jahwa Electron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Jahwa Electron, you can compare the effects of market volatilities on Busan Ind and Jahwa Electron 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 Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Jahwa Electron.
Diversification Opportunities for Busan Ind and Jahwa Electron
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Jahwa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron 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 Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of Busan Ind i.e., Busan Ind and Jahwa Electron go up and down completely randomly.
Pair Corralation between Busan Ind and Jahwa Electron
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.23 times more return on investment than Jahwa Electron. However, Busan Ind is 1.23 times more volatile than Jahwa Electron. It trades about 0.02 of its potential returns per unit of risk. Jahwa Electron is currently generating about -0.08 per unit of risk. If you would invest 6,095,598 in Busan Ind on September 1, 2024 and sell it today you would earn a total of 44,402 from holding Busan Ind or generate 0.73% 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. Jahwa Electron
Performance |
| Timeline |
| Busan Ind |
| Jahwa Electron |
Busan Ind and Jahwa Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Jahwa Electron
The main advantage of trading using opposite Busan Ind and Jahwa Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Jahwa Electron 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 Jahwa Electron will offset losses from the drop in Jahwa Electron's 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 |
| Jahwa Electron vs. CU Tech Corp | Jahwa Electron vs. Shinsegae Information Communication | Jahwa Electron vs. Nice Information Telecommunication | Jahwa Electron vs. Mobileleader CoLtd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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