Correlation Between Busan Industrial and Daou Data
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Daou Data 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 Daou Data 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 Daou Data Corp, you can compare the effects of market volatilities on Busan Industrial and Daou Data 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 Daou Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Daou Data.
Diversification Opportunities for Busan Industrial and Daou Data
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Busan and Daou is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp 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 Daou Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of Busan Industrial i.e., Busan Industrial and Daou Data go up and down completely randomly.
Pair Corralation between Busan Industrial and Daou Data
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 7.44 times more return on investment than Daou Data. However, Busan Industrial is 7.44 times more volatile than Daou Data Corp. It trades about 0.09 of its potential returns per unit of risk. Daou Data Corp is currently generating about -0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Daou Data Corp
Performance |
| Timeline |
| Busan Industrial |
| Daou Data Corp |
Busan Industrial and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Daou Data
The main advantage of trading using opposite Busan Industrial and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Daou Data 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 Daou Data will offset losses from the drop in Daou Data's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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