Correlation Between Busan Industrial and Shin Heung
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Shin Heung 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 Shin Heung 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 Shin Heung Energy, you can compare the effects of market volatilities on Busan Industrial and Shin Heung 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 Shin Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Shin Heung.
Diversification Opportunities for Busan Industrial and Shin Heung
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Busan and Shin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy 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 Shin Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of Busan Industrial i.e., Busan Industrial and Shin Heung go up and down completely randomly.
Pair Corralation between Busan Industrial and Shin Heung
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 1.19 times more return on investment than Shin Heung. However, Busan Industrial is 1.19 times more volatile than Shin Heung Energy. It trades about 0.03 of its potential returns per unit of risk. Shin Heung Energy is currently generating about -0.06 per unit of risk. If you would invest 6,424,282 in Busan Industrial Co on September 12, 2024 and sell it today you would earn a total of 795,718 from holding Busan Industrial Co or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.24% |
| Values | Daily Returns |
Busan Industrial Co vs. Shin Heung Energy
Performance |
| Timeline |
| Busan Industrial |
| Shin Heung Energy |
Busan Industrial and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Shin Heung
The main advantage of trading using opposite Busan Industrial and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Shin Heung 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 Shin Heung will offset losses from the drop in Shin Heung's long position.| Busan Industrial vs. Samsung Electronics Co | Busan Industrial vs. Samsung Electronics Co | Busan Industrial vs. SK Hynix | Busan Industrial vs. POSCO Holdings |
| Shin Heung vs. Ecopro BM Co | Shin Heung vs. Sangsin Energy Display | Shin Heung vs. Solution Advanced Technology | Shin Heung 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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