Correlation Between Busan Industrial and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal Co, you can compare the effects of market volatilities on Busan Industrial and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Seoyon Topmetal.
Diversification Opportunities for Busan Industrial and Seoyon Topmetal
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Busan and Seoyon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Busan Industrial i.e., Busan Industrial and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Busan Industrial and Seoyon Topmetal
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 2.19 times more return on investment than Seoyon Topmetal. However, Busan Industrial is 2.19 times more volatile than Seoyon Topmetal Co. It trades about 0.08 of its potential returns per unit of risk. Seoyon Topmetal Co is currently generating about 0.1 per unit of risk. If you would invest 5,280,000 in Busan Industrial Co on August 28, 2024 and sell it today you would earn a total of 350,000 from holding Busan Industrial Co or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Seoyon Topmetal Co
Performance |
| Timeline |
| Busan Industrial |
| Seoyon Topmetal |
Busan Industrial and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Seoyon Topmetal
The main advantage of trading using opposite Busan Industrial and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Busan Industrial vs. Sangsin Energy Display | Busan Industrial vs. Inzi Display CoLtd | Busan Industrial vs. Top Material Co | Busan Industrial vs. Ssangyong Materials Corp |
| Seoyon Topmetal vs. Busan Industrial Co | Seoyon Topmetal vs. Busan Ind | Seoyon Topmetal vs. Mirae Asset Daewoo | Seoyon Topmetal vs. UNISEM Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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