Correlation Between Busan Ind and Jin Air
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Jin Air 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 Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Jin Air Co, you can compare the effects of market volatilities on Busan Ind and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Jin Air.
Diversification Opportunities for Busan Ind and Jin Air
Poor diversification
The 3 months correlation between Busan and Jin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Busan Ind i.e., Busan Ind and Jin Air go up and down completely randomly.
Pair Corralation between Busan Ind and Jin Air
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.37 times more return on investment than Jin Air. However, Busan Ind is 1.37 times more volatile than Jin Air Co. It trades about 0.0 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.01 per unit of risk. If you would invest 7,280,853 in Busan Ind on September 1, 2024 and sell it today you would lose (1,140,853) from holding Busan Ind or give up 15.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Jin Air Co
Performance |
| Timeline |
| Busan Ind |
| Jin Air |
Busan Ind and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Jin Air
The main advantage of trading using opposite Busan Ind and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| Busan Ind vs. ABCO Electronics Co | Busan Ind vs. KG Eco Technology | Busan Ind vs. PJ Electronics Co | Busan Ind vs. DAEDUCK ELECTRONICS CoLtd |
| Jin Air vs. LS Materials | Jin Air vs. TOPMATERIAL LTD | Jin Air vs. Aprogen Healthcare Games | Jin Air vs. Netmarble Games Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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