Correlation Between Busan Industrial and KBSTAR TDF2050
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and KBSTAR TDF2050 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 KBSTAR TDF2050 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 KBSTAR TDF2050 Active, you can compare the effects of market volatilities on Busan Industrial and KBSTAR TDF2050 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 KBSTAR TDF2050. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and KBSTAR TDF2050.
Diversification Opportunities for Busan Industrial and KBSTAR TDF2050
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Busan and KBSTAR is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and KBSTAR TDF2050 Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBSTAR TDF2050 Active 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 KBSTAR TDF2050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBSTAR TDF2050 Active has no effect on the direction of Busan Industrial i.e., Busan Industrial and KBSTAR TDF2050 go up and down completely randomly.
Pair Corralation between Busan Industrial and KBSTAR TDF2050
Assuming the 90 days trading horizon Busan Industrial is expected to generate 1.65 times less return on investment than KBSTAR TDF2050. In addition to that, Busan Industrial is 4.88 times more volatile than KBSTAR TDF2050 Active. It trades about 0.02 of its total potential returns per unit of risk. KBSTAR TDF2050 Active is currently generating about 0.13 per unit of volatility. If you would invest 943,500 in KBSTAR TDF2050 Active on September 14, 2024 and sell it today you would earn a total of 403,500 from holding KBSTAR TDF2050 Active or generate 42.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. KBSTAR TDF2050 Active
Performance |
| Timeline |
| Busan Industrial |
| KBSTAR TDF2050 Active |
Busan Industrial and KBSTAR TDF2050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and KBSTAR TDF2050
The main advantage of trading using opposite Busan Industrial and KBSTAR TDF2050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, KBSTAR TDF2050 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 KBSTAR TDF2050 will offset losses from the drop in KBSTAR TDF2050'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 |
| KBSTAR TDF2050 vs. Busan Industrial Co | KBSTAR TDF2050 vs. Busan Ind | KBSTAR TDF2050 vs. Shinhan WTI Futures | KBSTAR TDF2050 vs. UNISEM 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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