Correlation Between Busan Industrial and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Nasmedia 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 Nasmedia 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 Nasmedia Co, you can compare the effects of market volatilities on Busan Industrial and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Nasmedia.
Diversification Opportunities for Busan Industrial and Nasmedia
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Busan and Nasmedia is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Busan Industrial i.e., Busan Industrial and Nasmedia go up and down completely randomly.
Pair Corralation between Busan Industrial and Nasmedia
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 1.28 times more return on investment than Nasmedia. However, Busan Industrial is 1.28 times more volatile than Nasmedia Co. It trades about -0.01 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.02 per unit of risk. If you would invest 6,464,123 in Busan Industrial Co on August 25, 2024 and sell it today you would lose (964,123) from holding Busan Industrial Co or give up 14.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Nasmedia Co
Performance |
| Timeline |
| Busan Industrial |
| Nasmedia |
Busan Industrial and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Nasmedia
The main advantage of trading using opposite Busan Industrial and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Busan Industrial vs. Cuckoo Electronics Co | Busan Industrial vs. Samwha Electronics Co | Busan Industrial vs. Sungwoo Electronics Co | Busan Industrial vs. Atinum Investment Co |
| Nasmedia vs. Busan Industrial Co | Nasmedia vs. Samlip General Foods | Nasmedia vs. Shinsegae Food | Nasmedia vs. CJ Seafood Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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