Correlation Between Busan Industrial and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Busan Industrial and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and GemVaxKAEL CoLtd.
Diversification Opportunities for Busan Industrial and GemVaxKAEL CoLtd
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Busan and GemVaxKAEL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Busan Industrial i.e., Busan Industrial and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Busan Industrial and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Busan Industrial is expected to generate 82.61 times less return on investment than GemVaxKAEL CoLtd. But when comparing it to its historical volatility, Busan Industrial Co is 2.05 times less risky than GemVaxKAEL CoLtd. It trades about 0.02 of its potential returns per unit of risk. GemVaxKAEL CoLtd is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 1,887,000 in GemVaxKAEL CoLtd on November 27, 2024 and sell it today you would earn a total of 1,588,000 from holding GemVaxKAEL CoLtd or generate 84.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Busan Industrial |
| GemVaxKAEL CoLtd |
Busan Industrial and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and GemVaxKAEL CoLtd
The main advantage of trading using opposite Busan Industrial and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Busan Industrial vs. ADTechnology CoLtd | Busan Industrial vs. Hwangkum Steel Technology | Busan Industrial vs. Dongil Metal Co | Busan Industrial vs. Cots Technology Co |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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