Correlation Between Kbi Metal and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Busan Industrial Co, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Busan Industrial.
Diversification Opportunities for Kbi Metal and Busan Industrial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kbi and Busan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and Kbi Metal 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 Kbi Metal Co 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 Kbi Metal i.e., Kbi Metal and Busan Industrial go up and down completely randomly.
Pair Corralation between Kbi Metal and Busan Industrial
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 1.9 times more return on investment than Busan Industrial. However, Kbi Metal is 1.9 times more volatile than Busan Industrial Co. It trades about 0.03 of its potential returns per unit of risk. Busan Industrial Co is currently generating about -0.02 per unit of risk. If you would invest 188,800 in Kbi Metal Co on August 28, 2024 and sell it today you would earn a total of 37,700 from holding Kbi Metal Co or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Busan Industrial Co
Performance |
| Timeline |
| Kbi Metal |
| Busan Industrial |
Kbi Metal and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Busan Industrial
The main advantage of trading using opposite Kbi Metal and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind | Kbi Metal vs. Mirae Asset Daewoo | Kbi Metal vs. UNISEM Co |
| Busan Industrial vs. Sangsin Energy Display | Busan Industrial vs. Inzi Display CoLtd | Busan Industrial vs. Top Material Co | Busan Industrial vs. Ssangyong Materials Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |