Correlation Between Busan Ind and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Duksan Hi 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 Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Duksan Hi Metal, you can compare the effects of market volatilities on Busan Ind and Duksan Hi 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 Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Duksan Hi.
Diversification Opportunities for Busan Ind and Duksan Hi
Excellent diversification
The 3 months correlation between Busan and Duksan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal 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 Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Busan Ind i.e., Busan Ind and Duksan Hi go up and down completely randomly.
Pair Corralation between Busan Ind and Duksan Hi
Assuming the 90 days trading horizon Busan Ind is expected to generate 0.9 times more return on investment than Duksan Hi. However, Busan Ind is 1.11 times less risky than Duksan Hi. It trades about 0.0 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.03 per unit of risk. If you would invest 7,380,455 in Busan Ind on September 2, 2024 and sell it today you would lose (1,240,455) from holding Busan Ind or give up 16.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Duksan Hi Metal
Performance |
| Timeline |
| Busan Ind |
| Duksan Hi Metal |
Busan Ind and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Duksan Hi
The main advantage of trading using opposite Busan Ind and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| Busan Ind vs. Daelim Industrial Co | Busan Ind vs. Samhwa Paint Industrial | Busan Ind vs. Daesung Hi Tech Co | Busan Ind vs. Korea Computer |
| Duksan Hi vs. Digital Power Communications | Duksan Hi vs. Dongil Metal Co | Duksan Hi vs. BGF Retail Co | Duksan Hi vs. Echomarketing 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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