Correlation Between Busan Ind and Humax
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Humax 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 Humax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Humax Co, you can compare the effects of market volatilities on Busan Ind and Humax 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 Humax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Humax.
Diversification Opportunities for Busan Ind and Humax
Pay attention - limited upside
The 3 months correlation between Busan and Humax is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax 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 Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of Busan Ind i.e., Busan Ind and Humax go up and down completely randomly.
Pair Corralation between Busan Ind and Humax
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.41 times more return on investment than Humax. However, Busan Ind is 1.41 times more volatile than Humax Co. It trades about 0.03 of its potential returns per unit of risk. Humax Co is currently generating about -0.15 per unit of risk. If you would invest 6,424,282 in Busan Ind on September 12, 2024 and sell it today you would earn a total of 795,718 from holding Busan Ind or generate 12.39% 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. Humax Co
Performance |
| Timeline |
| Busan Ind |
| Humax |
Busan Ind and Humax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Humax
The main advantage of trading using opposite Busan Ind and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Humax 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 Humax will offset losses from the drop in Humax's long position.| Busan Ind vs. Settlebank | Busan Ind vs. Jeju Bank | Busan Ind vs. Daejoo Electronic Materials | Busan Ind vs. InfoBank |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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