Correlation Between Busan Ind and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both Busan Ind and InnoTherapy 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 InnoTherapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and InnoTherapy, you can compare the effects of market volatilities on Busan Ind and InnoTherapy 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 InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and InnoTherapy.
Diversification Opportunities for Busan Ind and InnoTherapy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and InnoTherapy is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy 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 InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of Busan Ind i.e., Busan Ind and InnoTherapy go up and down completely randomly.
Pair Corralation between Busan Ind and InnoTherapy
Assuming the 90 days trading horizon Busan Ind is expected to generate 3.63 times more return on investment than InnoTherapy. However, Busan Ind is 3.63 times more volatile than InnoTherapy. It trades about 0.1 of its potential returns per unit of risk. InnoTherapy is currently generating about 0.09 per unit of risk. If you would invest 5,470,000 in Busan Ind on September 2, 2024 and sell it today you would earn a total of 670,000 from holding Busan Ind or generate 12.25% 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. InnoTherapy
Performance |
| Timeline |
| Busan Ind |
| InnoTherapy |
Busan Ind and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and InnoTherapy
The main advantage of trading using opposite Busan Ind and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy'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 |
| InnoTherapy vs. Nable Communications | InnoTherapy vs. Korea Computer | InnoTherapy vs. Jinro Distillers Co | InnoTherapy vs. Homecast 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |