Correlation Between KTB Investment and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both KTB Investment 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 KTB Investment and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTB Investment Securities and Busan Industrial Co, you can compare the effects of market volatilities on KTB Investment 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 KTB Investment with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Busan Industrial.
Diversification Opportunities for KTB Investment and Busan Industrial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KTB and Busan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and KTB Investment 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 KTB Investment Securities 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 KTB Investment i.e., KTB Investment and Busan Industrial go up and down completely randomly.
Pair Corralation between KTB Investment and Busan Industrial
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 1.08 times more return on investment than Busan Industrial. However, KTB Investment is 1.08 times more volatile than Busan Industrial Co. It trades about 0.22 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.08 per unit of risk. If you would invest 249,500 in KTB Investment Securities on October 11, 2024 and sell it today you would earn a total of 51,000 from holding KTB Investment Securities or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. Busan Industrial Co
Performance |
| Timeline |
| KTB Investment Securities |
| Busan Industrial |
KTB Investment and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Busan Industrial
The main advantage of trading using opposite KTB Investment and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment 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.| KTB Investment vs. Hwangkum Steel Technology | KTB Investment vs. Automobile Pc | KTB Investment vs. Handok Clean Tech | KTB Investment vs. Vina Technology Co |
| Busan Industrial vs. LG Chemicals | Busan Industrial vs. Korean Reinsurance Co | Busan Industrial vs. Jeju Bank | Busan Industrial vs. Lotte Chilsung Beverage |
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.
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