Correlation Between Busan Ind and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Busan Ind and BGF Retail 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 BGF Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and BGF Retail Co, you can compare the effects of market volatilities on Busan Ind and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and BGF Retail.
Diversification Opportunities for Busan Ind and BGF Retail
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and BGF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Busan Ind i.e., Busan Ind and BGF Retail go up and down completely randomly.
Pair Corralation between Busan Ind and BGF Retail
Assuming the 90 days trading horizon Busan Ind is expected to generate 2.55 times more return on investment than BGF Retail. However, Busan Ind is 2.55 times more volatile than BGF Retail Co. It trades about 0.06 of its potential returns per unit of risk. BGF Retail Co is currently generating about 0.0 per unit of risk. If you would invest 6,220,000 in Busan Ind on October 26, 2024 and sell it today you would earn a total of 1,710,000 from holding Busan Ind or generate 27.49% 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. BGF Retail Co
Performance |
| Timeline |
| Busan Ind |
| BGF Retail |
Busan Ind and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and BGF Retail
The main advantage of trading using opposite Busan Ind and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| Busan Ind vs. YG Entertainment | Busan Ind vs. Lotte Data Communication | Busan Ind vs. LG Household Healthcare | Busan Ind vs. Barunson Entertainment Arts |
| BGF Retail vs. Busan Industrial Co | BGF Retail vs. Busan Ind | BGF Retail vs. RPBio Inc | BGF Retail vs. Finebesteel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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