Correlation Between Busan Ind and MEDICOX
Can any of the company-specific risk be diversified away by investing in both Busan Ind and MEDICOX 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 MEDICOX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and MEDICOX Co, you can compare the effects of market volatilities on Busan Ind and MEDICOX 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 MEDICOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and MEDICOX.
Diversification Opportunities for Busan Ind and MEDICOX
Very good diversification
The 3 months correlation between Busan and MEDICOX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and MEDICOX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICOX 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 MEDICOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICOX has no effect on the direction of Busan Ind i.e., Busan Ind and MEDICOX go up and down completely randomly.
Pair Corralation between Busan Ind and MEDICOX
Assuming the 90 days trading horizon Busan Ind is expected to generate 0.49 times more return on investment than MEDICOX. However, Busan Ind is 2.04 times less risky than MEDICOX. It trades about -0.01 of its potential returns per unit of risk. MEDICOX Co is currently generating about -0.06 per unit of risk. If you would invest 6,424,282 in Busan Ind on August 26, 2024 and sell it today you would lose (924,282) from holding Busan Ind or give up 14.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. MEDICOX Co
Performance |
| Timeline |
| Busan Ind |
| MEDICOX |
Busan Ind and MEDICOX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and MEDICOX
The main advantage of trading using opposite Busan Ind and MEDICOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, MEDICOX 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 MEDICOX will offset losses from the drop in MEDICOX's long position.| Busan Ind vs. Samsung Electronics Co | Busan Ind vs. Samsung Electronics Co | Busan Ind vs. LG Energy Solution | Busan Ind vs. SK Hynix |
| MEDICOX vs. Vitzro Tech Co | MEDICOX vs. Busan Industrial Co | MEDICOX vs. Busan Ind | MEDICOX vs. Mirae Asset Daewoo |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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