Correlation Between Busan Ind and MS Autotech
Can any of the company-specific risk be diversified away by investing in both Busan Ind and MS Autotech 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 MS Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and MS Autotech CoLtd, you can compare the effects of market volatilities on Busan Ind and MS Autotech 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 MS Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and MS Autotech.
Diversification Opportunities for Busan Ind and MS Autotech
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Busan and 123040 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and MS Autotech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MS Autotech CoLtd 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 MS Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MS Autotech CoLtd has no effect on the direction of Busan Ind i.e., Busan Ind and MS Autotech go up and down completely randomly.
Pair Corralation between Busan Ind and MS Autotech
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.29 times more return on investment than MS Autotech. However, Busan Ind is 1.29 times more volatile than MS Autotech CoLtd. It trades about 0.02 of its potential returns per unit of risk. MS Autotech CoLtd is currently generating about -0.04 per unit of risk. If you would invest 7,340,614 in Busan Ind on November 27, 2024 and sell it today you would earn a total of 359,386 from holding Busan Ind or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. MS Autotech CoLtd
Performance |
| Timeline |
| Busan Ind |
| MS Autotech CoLtd |
Busan Ind and MS Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and MS Autotech
The main advantage of trading using opposite Busan Ind and MS Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, MS Autotech 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 MS Autotech will offset losses from the drop in MS Autotech's long position.| Busan Ind vs. Ssangyong Information Communication | Busan Ind vs. E Investment Development | Busan Ind vs. Stic Investments | Busan Ind vs. Korea Investment Holdings |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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