Correlation Between Busan Industrial and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Korea Electronic 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 Korea Electronic 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 Korea Electronic Certification, you can compare the effects of market volatilities on Busan Industrial and Korea Electronic 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 Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Korea Electronic.
Diversification Opportunities for Busan Industrial and Korea Electronic
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Busan and Korea is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Busan Industrial i.e., Busan Industrial and Korea Electronic go up and down completely randomly.
Pair Corralation between Busan Industrial and Korea Electronic
Assuming the 90 days trading horizon Busan Industrial is expected to generate 2.98 times less return on investment than Korea Electronic. In addition to that, Busan Industrial is 2.01 times more volatile than Korea Electronic Certification. It trades about 0.04 of its total potential returns per unit of risk. Korea Electronic Certification is currently generating about 0.26 per unit of volatility. If you would invest 311,000 in Korea Electronic Certification on November 29, 2024 and sell it today you would earn a total of 23,500 from holding Korea Electronic Certification or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Korea Electronic Certification
Performance |
| Timeline |
| Busan Industrial |
| Korea Electronic Cer |
Busan Industrial and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Korea Electronic
The main advantage of trading using opposite Busan Industrial and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Korea Electronic 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 Korea Electronic will offset losses from the drop in Korea Electronic's long position.| Busan Industrial vs. Settlebank | Busan Industrial vs. Jeju Bank | Busan Industrial vs. Incar Financial Service | Busan Industrial vs. Dgb Financial |
| Korea Electronic vs. Cube Entertainment | Korea Electronic vs. Sungmoon Electronics Co | Korea Electronic vs. Hanjin Transportation Co | Korea Electronic vs. ABCO Electronics Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |