Correlation Between Busan Industrial and SNTEnergy
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and SNTEnergy 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 SNTEnergy 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 SNTEnergy Co, you can compare the effects of market volatilities on Busan Industrial and SNTEnergy 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 SNTEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and SNTEnergy.
Diversification Opportunities for Busan Industrial and SNTEnergy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Busan and SNTEnergy is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and SNTEnergy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNTEnergy 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 SNTEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNTEnergy has no effect on the direction of Busan Industrial i.e., Busan Industrial and SNTEnergy go up and down completely randomly.
Pair Corralation between Busan Industrial and SNTEnergy
Assuming the 90 days trading horizon Busan Industrial is expected to generate 3.5 times less return on investment than SNTEnergy. In addition to that, Busan Industrial is 1.09 times more volatile than SNTEnergy Co. It trades about 0.03 of its total potential returns per unit of risk. SNTEnergy Co is currently generating about 0.13 per unit of volatility. If you would invest 1,018,516 in SNTEnergy Co on September 5, 2024 and sell it today you would earn a total of 830,484 from holding SNTEnergy Co or generate 81.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. SNTEnergy Co
Performance |
| Timeline |
| Busan Industrial |
| SNTEnergy |
Busan Industrial and SNTEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and SNTEnergy
The main advantage of trading using opposite Busan Industrial and SNTEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, SNTEnergy 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 SNTEnergy will offset losses from the drop in SNTEnergy's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| SNTEnergy vs. Lotte Data Communication | SNTEnergy vs. Korea Computer | SNTEnergy vs. Daishin Information Communications | SNTEnergy vs. Sangsin Energy Display |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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