Correlation Between Busan Ind and UNISEM
Can any of the company-specific risk be diversified away by investing in both Busan Ind and UNISEM 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 UNISEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and UNISEM Co, you can compare the effects of market volatilities on Busan Ind and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and UNISEM.
Diversification Opportunities for Busan Ind and UNISEM
Very good diversification
The 3 months correlation between Busan and UNISEM is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Busan Ind i.e., Busan Ind and UNISEM go up and down completely randomly.
Pair Corralation between Busan Ind and UNISEM
Assuming the 90 days trading horizon Busan Ind is expected to generate 0.95 times more return on investment than UNISEM. However, Busan Ind is 1.05 times less risky than UNISEM. It trades about 0.02 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.09 per unit of risk. If you would invest 5,590,000 in Busan Ind on August 24, 2024 and sell it today you would lose (60,000) from holding Busan Ind or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. UNISEM Co
Performance |
| Timeline |
| Busan Ind |
| UNISEM |
Busan Ind and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and UNISEM
The main advantage of trading using opposite Busan Ind and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Busan Ind vs. FNC Entertainment Co | Busan Ind vs. T3 Entertainment Co | Busan Ind vs. Atinum Investment Co | Busan Ind vs. JYP Entertainment Corp |
| UNISEM vs. Shinsegae Food | UNISEM vs. Seoul Food Industrial | UNISEM vs. HB Technology TD | UNISEM vs. Zaram Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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