Correlation Between Busan Ind and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Samji 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 Samji 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 Samji Electronics Co, you can compare the effects of market volatilities on Busan Ind and Samji 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 Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Samji Electronics.
Diversification Opportunities for Busan Ind and Samji Electronics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Busan and Samji is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics 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 Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Busan Ind i.e., Busan Ind and Samji Electronics go up and down completely randomly.
Pair Corralation between Busan Ind and Samji Electronics
Assuming the 90 days trading horizon Busan Ind is expected to generate 6.23 times more return on investment than Samji Electronics. However, Busan Ind is 6.23 times more volatile than Samji Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Samji Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 5,280,000 in Busan Ind on August 29, 2024 and sell it today you would earn a total of 400,000 from holding Busan Ind or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Samji Electronics Co
Performance |
| Timeline |
| Busan Ind |
| Samji Electronics |
Busan Ind and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Samji Electronics
The main advantage of trading using opposite Busan Ind and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Samji 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.| Busan Ind vs. PJ Metal Co | Busan Ind vs. Lotte Chilsung Beverage | Busan Ind vs. Sempio Foods Co | Busan Ind vs. Korean Reinsurance Co |
| Samji Electronics vs. Daou Data Corp | Samji Electronics vs. Busan Industrial Co | Samji Electronics vs. Busan Ind | Samji Electronics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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