Correlation Between Oriental Precision and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both Oriental Precision and Busan Industrial 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 Oriental Precision and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Precision Engineering and Busan Industrial Co, you can compare the effects of market volatilities on Oriental Precision and Busan Industrial 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 Oriental Precision with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Precision and Busan Industrial.
Diversification Opportunities for Oriental Precision and Busan Industrial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oriental and Busan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Precision Engineering and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and Oriental Precision 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 Oriental Precision Engineering are associated (or correlated) with Busan Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Industrial has no effect on the direction of Oriental Precision i.e., Oriental Precision and Busan Industrial go up and down completely randomly.
Pair Corralation between Oriental Precision and Busan Industrial
Assuming the 90 days trading horizon Oriental Precision Engineering is expected to under-perform the Busan Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Oriental Precision Engineering is 2.27 times less risky than Busan Industrial. The stock trades about -0.01 of its potential returns per unit of risk. The Busan Industrial Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,630,000 in Busan Industrial Co on September 24, 2024 and sell it today you would earn a total of 2,230,000 from holding Busan Industrial Co or generate 39.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Precision Engineering vs. Busan Industrial Co
Performance |
| Timeline |
| Oriental Precision |
| Busan Industrial |
Oriental Precision and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Precision and Busan Industrial
The main advantage of trading using opposite Oriental Precision and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Precision position performs unexpectedly, Busan Industrial 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 Busan Industrial will offset losses from the drop in Busan Industrial's long position.| Oriental Precision vs. KakaoBank Corp | Oriental Precision vs. NICE Information Service | Oriental Precision vs. Korea Information Engineering | Oriental Precision vs. Lotte Data Communication |
| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Wonbang Tech Co | Busan Industrial vs. Busan Ind | Busan Industrial vs. Mirae Asset Daewoo |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |