Correlation Between Busan Ind and Green Cross
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Green Cross 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 Green Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Green Cross Medical, you can compare the effects of market volatilities on Busan Ind and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Green Cross.
Diversification Opportunities for Busan Ind and Green Cross
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Busan and Green is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of Busan Ind i.e., Busan Ind and Green Cross go up and down completely randomly.
Pair Corralation between Busan Ind and Green Cross
Assuming the 90 days trading horizon Busan Ind is expected to generate 2.49 times more return on investment than Green Cross. However, Busan Ind is 2.49 times more volatile than Green Cross Medical. It trades about 0.04 of its potential returns per unit of risk. Green Cross Medical is currently generating about -0.16 per unit of risk. If you would invest 5,380,000 in Busan Ind on August 25, 2024 and sell it today you would earn a total of 120,000 from holding Busan Ind or generate 2.23% 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. Green Cross Medical
Performance |
| Timeline |
| Busan Ind |
| Green Cross Medical |
Busan Ind and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Green Cross
The main advantage of trading using opposite Busan Ind and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| Busan Ind vs. Daekyung Machinery Engineering | Busan Ind vs. Shinsegae Engineering Construction | Busan Ind vs. RF Materials Co | Busan Ind vs. Top Material Co |
| Green Cross vs. Medy Tox | Green Cross vs. Genexine | Green Cross vs. Busan Industrial Co | Green Cross vs. Busan Ind |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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