Correlation Between Busan Industrial and LX Semicon
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and LX Semicon 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 LX Semicon 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 LX Semicon Co, you can compare the effects of market volatilities on Busan Industrial and LX Semicon 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 LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and LX Semicon.
Diversification Opportunities for Busan Industrial and LX Semicon
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and 108320 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon 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 LX Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LX Semicon has no effect on the direction of Busan Industrial i.e., Busan Industrial and LX Semicon go up and down completely randomly.
Pair Corralation between Busan Industrial and LX Semicon
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 1.18 times more return on investment than LX Semicon. However, Busan Industrial is 1.18 times more volatile than LX Semicon Co. It trades about -0.01 of its potential returns per unit of risk. LX Semicon Co is currently generating about -0.03 per unit of risk. If you would invest 7,848,581 in Busan Industrial Co on September 1, 2024 and sell it today you would lose (1,708,581) from holding Busan Industrial Co or give up 21.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.77% |
| Values | Daily Returns |
Busan Industrial Co vs. LX Semicon Co
Performance |
| Timeline |
| Busan Industrial |
| LX Semicon |
Busan Industrial and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and LX Semicon
The main advantage of trading using opposite Busan Industrial and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, LX Semicon 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 LX Semicon will offset losses from the drop in LX Semicon's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| LX Semicon vs. Dongsin Engineering Construction | LX Semicon vs. Doosan Fuel Cell | LX Semicon vs. Daishin Balance 1 | LX Semicon vs. Total Soft Bank |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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