Correlation Between Busan Industrial and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Myoung Shin 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 Industrial and Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Industrial Co and Myoung Shin Industrial, you can compare the effects of market volatilities on Busan Industrial and Myoung Shin 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 Industrial with a short position of Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Myoung Shin.
Diversification Opportunities for Busan Industrial and Myoung Shin
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Myoung is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial and Busan Industrial 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 Industrial Co are associated (or correlated) with Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Busan Industrial i.e., Busan Industrial and Myoung Shin go up and down completely randomly.
Pair Corralation between Busan Industrial and Myoung Shin
Assuming the 90 days trading horizon Busan Industrial is expected to generate 1.67 times less return on investment than Myoung Shin. In addition to that, Busan Industrial is 1.32 times more volatile than Myoung Shin Industrial. It trades about 0.03 of its total potential returns per unit of risk. Myoung Shin Industrial is currently generating about 0.06 per unit of volatility. If you would invest 1,074,000 in Myoung Shin Industrial on November 7, 2024 and sell it today you would earn a total of 18,000 from holding Myoung Shin Industrial or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Myoung Shin Industrial
Performance |
| Timeline |
| Busan Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Myoung Shin Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Busan Industrial and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Myoung Shin
The main advantage of trading using opposite Busan Industrial and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Busan Industrial vs. Raontech | Busan Industrial vs. V One Tech Co | Busan Industrial vs. A Tech Solution Co | Busan Industrial vs. Daehan Synthetic Fiber |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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