Correlation Between Busan Industrial and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and SGA Solutions 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 SGA Solutions 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 SGA Solutions CoLtd, you can compare the effects of market volatilities on Busan Industrial and SGA Solutions 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 SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and SGA Solutions.
Diversification Opportunities for Busan Industrial and SGA Solutions
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Busan and SGA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions 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 SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of Busan Industrial i.e., Busan Industrial and SGA Solutions go up and down completely randomly.
Pair Corralation between Busan Industrial and SGA Solutions
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 0.83 times more return on investment than SGA Solutions. However, Busan Industrial Co is 1.21 times less risky than SGA Solutions. It trades about 0.27 of its potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.13 per unit of risk. If you would invest 7,450,000 in Busan Industrial Co on October 30, 2024 and sell it today you would earn a total of 770,000 from holding Busan Industrial Co or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. SGA Solutions CoLtd
Performance |
| Timeline |
| Busan Industrial |
| SGA Solutions CoLtd |
Busan Industrial and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and SGA Solutions
The main advantage of trading using opposite Busan Industrial and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.| Busan Industrial vs. Sangsangin Investment Securities | Busan Industrial vs. SM Entertainment Co | Busan Industrial vs. YG Entertainment | Busan Industrial vs. ECSTELECOM 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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