Correlation Between Busan Industrial and Neungyule Education
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Neungyule Education 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 Neungyule Education 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 Neungyule Education, you can compare the effects of market volatilities on Busan Industrial and Neungyule Education 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 Neungyule Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Neungyule Education.
Diversification Opportunities for Busan Industrial and Neungyule Education
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Busan and Neungyule is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Neungyule Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neungyule Education 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 Neungyule Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neungyule Education has no effect on the direction of Busan Industrial i.e., Busan Industrial and Neungyule Education go up and down completely randomly.
Pair Corralation between Busan Industrial and Neungyule Education
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 1.14 times more return on investment than Neungyule Education. However, Busan Industrial is 1.14 times more volatile than Neungyule Education. It trades about 0.04 of its potential returns per unit of risk. Neungyule Education is currently generating about -0.04 per unit of risk. If you would invest 5,450,000 in Busan Industrial Co on September 3, 2024 and sell it today you would earn a total of 690,000 from holding Busan Industrial Co or generate 12.66% 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. Neungyule Education
Performance |
| Timeline |
| Busan Industrial |
| Neungyule Education |
Busan Industrial and Neungyule Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Neungyule Education
The main advantage of trading using opposite Busan Industrial and Neungyule Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Neungyule Education 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 Neungyule Education will offset losses from the drop in Neungyule Education's long position.| Busan Industrial vs. Pureun Mutual Savings | Busan Industrial vs. Atinum Investment Co | Busan Industrial vs. Korea Investment Holdings | Busan Industrial vs. Hanjoo Light Metal |
| Neungyule Education vs. Korea Real Estate | Neungyule Education vs. Busan Industrial Co | Neungyule Education vs. UNISEM Co | Neungyule Education vs. RPBio Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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