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 200, 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
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Busan and Samsung is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Samsung KODEX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX 200 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 200 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 6.87 times more return on investment than Samsung KODEX. However, Busan Industrial is 6.87 times more volatile than Samsung KODEX 200. It trades about 0.08 of its potential returns per unit of risk. Samsung KODEX 200 is currently generating about -0.17 per unit of risk. If you would invest 5,920,000 in Busan Industrial Co on August 31, 2024 and sell it today you would earn a total of 450,000 from holding Busan Industrial Co or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Busan Industrial Co vs. Samsung KODEX 200
Performance |
| Timeline |
| Busan Industrial |
| Samsung KODEX 200 |
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. Samsung KODEX IT | Samsung KODEX vs. Samsung KODEX Machinary | Samsung KODEX vs. Samsung KODEX Samsung | Samsung KODEX vs. Samsung Asset Management |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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