Correlation Between Busan Industrial and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on Busan Industrial and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Konan Technology.
Diversification Opportunities for Busan Industrial and Konan Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Busan and Konan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Busan Industrial i.e., Busan Industrial and Konan Technology go up and down completely randomly.
Pair Corralation between Busan Industrial and Konan Technology
Assuming the 90 days trading horizon Busan Industrial Co is expected to under-perform the Konan Technology. But the stock apears to be less risky and, when comparing its historical volatility, Busan Industrial Co is 2.71 times less risky than Konan Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Konan Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,230,000 in Konan Technology on November 4, 2024 and sell it today you would earn a total of 315,000 from holding Konan Technology or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Konan Technology
Performance |
| Timeline |
| Busan Industrial |
| Konan Technology |
Busan Industrial and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Konan Technology
The main advantage of trading using opposite Busan Industrial and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Busan Industrial vs. Leaders Technology Investment | Busan Industrial vs. Korea Investment Holdings | Busan Industrial vs. Golden Bridge Investment | Busan Industrial vs. Sangsangin Investment Securities |
| Konan Technology vs. Kaonmedia Co | Konan Technology vs. Hyundai Home Shopping | Konan Technology vs. Samlip General Foods | Konan Technology vs. Dongbu Insurance 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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