Correlation Between Busan Industrial and Samsung KODEX
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Samsung KODEX 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 Samsung KODEX 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 Samsung KODEX Machinary, you can compare the effects of market volatilities on Busan Industrial and Samsung KODEX 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 Samsung KODEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Samsung KODEX.
Diversification Opportunities for Busan Industrial and Samsung KODEX
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Busan and Samsung is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Samsung KODEX Machinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX Machinary 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 Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX Machinary has no effect on the direction of Busan Industrial i.e., Busan Industrial and Samsung KODEX go up and down completely randomly.
Pair Corralation between Busan Industrial and Samsung KODEX
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 3.72 times more return on investment than Samsung KODEX. However, Busan Industrial is 3.72 times more volatile than Samsung KODEX Machinary. It trades about 0.1 of its potential returns per unit of risk. Samsung KODEX Machinary is currently generating about -0.01 per unit of risk. If you would invest 5,470,000 in Busan Industrial Co on September 2, 2024 and sell it today you would earn a total of 670,000 from holding Busan Industrial Co or generate 12.25% 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. Samsung KODEX Machinary
Performance |
| Timeline |
| Busan Industrial |
| Samsung KODEX Machinary |
Busan Industrial and Samsung KODEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Samsung KODEX
The main advantage of trading using opposite Busan Industrial and Samsung KODEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Samsung KODEX 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 Samsung KODEX will offset losses from the drop in Samsung KODEX's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX vs. Mirae Asset Daewoo | Samsung KODEX vs. Shinhan WTI Futures |
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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