Correlation Between Busan Industrial and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Barunson Entertainment 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 Barunson Entertainment 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 Barunson Entertainment Arts, you can compare the effects of market volatilities on Busan Industrial and Barunson Entertainment 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 Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Barunson Entertainment.
Diversification Opportunities for Busan Industrial and Barunson Entertainment
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Barunson is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of Busan Industrial i.e., Busan Industrial and Barunson Entertainment go up and down completely randomly.
Pair Corralation between Busan Industrial and Barunson Entertainment
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 3.85 times more return on investment than Barunson Entertainment. However, Busan Industrial is 3.85 times more volatile than Barunson Entertainment Arts. It trades about 0.09 of its potential returns per unit of risk. Barunson Entertainment Arts 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Barunson Entertainment Arts
Performance |
| Timeline |
| Busan Industrial |
| Barunson Entertainment |
Busan Industrial and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Barunson Entertainment
The main advantage of trading using opposite Busan Industrial and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| Barunson Entertainment vs. Daishin Information Communications | Barunson Entertainment vs. DB Financial Investment | Barunson Entertainment vs. BNK Financial Group | Barunson Entertainment vs. Jeju 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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