Correlation Between Busan Industrial and EO Technics
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and EO Technics 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 EO Technics 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 EO Technics Co, you can compare the effects of market volatilities on Busan Industrial and EO Technics 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 EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and EO Technics.
Diversification Opportunities for Busan Industrial and EO Technics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Busan and 039030 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics 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 EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of Busan Industrial i.e., Busan Industrial and EO Technics go up and down completely randomly.
Pair Corralation between Busan Industrial and EO Technics
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 1.86 times more return on investment than EO Technics. However, Busan Industrial is 1.86 times more volatile than EO Technics Co. It trades about 0.09 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.37 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 | 95.65% |
| Values | Daily Returns |
Busan Industrial Co vs. EO Technics Co
Performance |
| Timeline |
| Busan Industrial |
| EO Technics |
Busan Industrial and EO Technics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and EO Technics
The main advantage of trading using opposite Busan Industrial and EO Technics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, EO Technics 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 EO Technics will offset losses from the drop in EO Technics' long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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