Correlation Between Busan Industrial and DongWon Development
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and DongWon Development 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 DongWon Development 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 DongWon Development CoLtd, you can compare the effects of market volatilities on Busan Industrial and DongWon Development 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 DongWon Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and DongWon Development.
Diversification Opportunities for Busan Industrial and DongWon Development
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and DongWon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and DongWon Development CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DongWon Development CoLtd 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 DongWon Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DongWon Development CoLtd has no effect on the direction of Busan Industrial i.e., Busan Industrial and DongWon Development go up and down completely randomly.
Pair Corralation between Busan Industrial and DongWon Development
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 7.27 times more return on investment than DongWon Development. However, Busan Industrial is 7.27 times more volatile than DongWon Development CoLtd. It trades about 0.09 of its potential returns per unit of risk. DongWon Development CoLtd is currently generating about -0.32 per unit of risk. If you would invest 5,600,000 in Busan Industrial Co on September 1, 2024 and sell it today you would earn a total of 540,000 from holding Busan Industrial Co or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Busan Industrial Co vs. DongWon Development CoLtd
Performance |
| Timeline |
| Busan Industrial |
| DongWon Development CoLtd |
Busan Industrial and DongWon Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and DongWon Development
The main advantage of trading using opposite Busan Industrial and DongWon Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, DongWon Development 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 DongWon Development will offset losses from the drop in DongWon Development's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| DongWon Development vs. Busan Industrial Co | DongWon Development vs. Busan Ind | DongWon Development vs. Mirae Asset Daewoo | DongWon Development 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |