Correlation Between Busan Industrial and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Dongil Technology 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 Dongil Technology 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 Dongil Technology, you can compare the effects of market volatilities on Busan Industrial and Dongil Technology 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Dongil Technology.
Diversification Opportunities for Busan Industrial and Dongil Technology
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Busan and Dongil is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Busan Industrial i.e., Busan Industrial and Dongil Technology go up and down completely randomly.
Pair Corralation between Busan Industrial and Dongil Technology
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 8.75 times more return on investment than Dongil Technology. However, Busan Industrial is 8.75 times more volatile than Dongil Technology. It trades about 0.1 of its potential returns per unit of risk. Dongil Technology is currently generating about -0.26 per unit of risk. If you would invest 5,470,000 in Busan Industrial Co on September 2, 2024 and sell it today you would earn a total of 670,000 from holding Busan Industrial Co or generate 12.25% 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. Dongil Technology
Performance |
| Timeline |
| Busan Industrial |
| Dongil Technology |
Busan Industrial and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Dongil Technology
The main advantage of trading using opposite Busan Industrial and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| Dongil Technology vs. Dongsin Engineering Construction | Dongil Technology vs. Doosan Fuel Cell | Dongil Technology vs. Daishin Balance 1 | Dongil Technology vs. Total Soft Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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