Correlation Between Busan Industrial and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse Dollar, you can compare the effects of market volatilities on Busan Industrial and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Shinhan Inverse.
Diversification Opportunities for Busan Industrial and Shinhan Inverse
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Busan and Shinhan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Shinhan Inverse Dollar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Dollar 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Dollar has no effect on the direction of Busan Industrial i.e., Busan Industrial and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Busan Industrial and Shinhan Inverse
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 11.32 times more return on investment than Shinhan Inverse. However, Busan Industrial is 11.32 times more volatile than Shinhan Inverse Dollar. It trades about 0.11 of its potential returns per unit of risk. Shinhan Inverse Dollar is currently generating about -0.25 per unit of risk. If you would invest 7,116,263 in Busan Industrial Co on October 9, 2024 and sell it today you would earn a total of 533,737 from holding Busan Industrial Co or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Shinhan Inverse Dollar
Performance |
| Timeline |
| Busan Industrial |
| Shinhan Inverse Dollar |
Busan Industrial and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Shinhan Inverse
The main advantage of trading using opposite Busan Industrial and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Busan Industrial vs. Digital Power Communications | Busan Industrial vs. Display Tech Co | Busan Industrial vs. iNtRON Biotechnology | Busan Industrial vs. Ssangyong Information Communication |
| Shinhan Inverse vs. Busan Industrial Co | Shinhan Inverse vs. Busan Ind | Shinhan Inverse vs. Mirae Asset Daewoo | Shinhan Inverse 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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