Correlation Between Busan Ind and DC Media
Can any of the company-specific risk be diversified away by investing in both Busan Ind and DC Media 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 DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and DC Media CoLtd, you can compare the effects of market volatilities on Busan Ind and DC Media 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 DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and DC Media.
Diversification Opportunities for Busan Ind and DC Media
Modest diversification
The 3 months correlation between Busan and 263720 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and DC Media CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media 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 DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media CoLtd has no effect on the direction of Busan Ind i.e., Busan Ind and DC Media go up and down completely randomly.
Pair Corralation between Busan Ind and DC Media
Assuming the 90 days trading horizon Busan Ind is expected to generate 2.37 times more return on investment than DC Media. However, Busan Ind is 2.37 times more volatile than DC Media CoLtd. It trades about 0.14 of its potential returns per unit of risk. DC Media CoLtd is currently generating about 0.26 per unit of risk. If you would invest 6,220,000 in Busan Ind on August 30, 2024 and sell it today you would earn a total of 1,160,000 from holding Busan Ind or generate 18.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Busan Ind vs. DC Media CoLtd
Performance |
| Timeline |
| Busan Ind |
| DC Media CoLtd |
Busan Ind and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and DC Media
The main advantage of trading using opposite Busan Ind and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media's long position.| Busan Ind vs. Sangshin Electronics Co | Busan Ind vs. SungMoon Electronics Co | Busan Ind vs. ABCO Electronics Co | Busan Ind vs. Okins Electronics Co |
| DC Media vs. Formetal Co | DC Media vs. Kbi Metal Co | DC Media vs. Pan Entertainment Co | DC Media vs. Barunson Entertainment Arts |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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