Correlation Between Busan Industrial and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Busan Industrial and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and SEOJEON ELECTRIC.
Diversification Opportunities for Busan Industrial and SEOJEON ELECTRIC
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Busan and SEOJEON is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Busan Industrial i.e., Busan Industrial and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Busan Industrial and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 0.75 times more return on investment than SEOJEON ELECTRIC. However, Busan Industrial Co is 1.34 times less risky than SEOJEON ELECTRIC. It trades about 0.0 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.0 per unit of risk. If you would invest 7,141,411 in Busan Industrial Co on August 31, 2024 and sell it today you would lose (771,411) from holding Busan Industrial Co or give up 10.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Busan Industrial |
| SEOJEON ELECTRIC MAC |
Busan Industrial and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and SEOJEON ELECTRIC
The main advantage of trading using opposite Busan Industrial and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| SEOJEON ELECTRIC vs. Korea New Network | SEOJEON ELECTRIC vs. ICD Co | SEOJEON ELECTRIC vs. DYPNF CoLtd | SEOJEON ELECTRIC vs. Busan Industrial Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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