Correlation Between Busan Industrial and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Busan Industrial and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Hansol Homedeco.
Diversification Opportunities for Busan Industrial and Hansol Homedeco
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Hansol is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Busan Industrial i.e., Busan Industrial and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Busan Industrial and Hansol Homedeco
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 2.07 times more return on investment than Hansol Homedeco. However, Busan Industrial is 2.07 times more volatile than Hansol Homedeco Co. It trades about 0.02 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of risk. If you would invest 6,962,129 in Busan Industrial Co on September 24, 2024 and sell it today you would earn a total of 787,871 from holding Busan Industrial Co or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Busan Industrial Co vs. Hansol Homedeco Co
Performance |
| Timeline |
| Busan Industrial |
| Hansol Homedeco |
Busan Industrial and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Hansol Homedeco
The main advantage of trading using opposite Busan Industrial and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Wonbang Tech Co | Busan Industrial vs. Busan Ind | Busan Industrial vs. Mirae Asset Daewoo |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Wonbang Tech Co | Hansol Homedeco vs. Busan Industrial Co | Hansol Homedeco vs. Busan Ind |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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