Correlation Between Barunson Entertainment and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both Barunson Entertainment and Seoul Electronics 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 Barunson Entertainment and Seoul Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barunson Entertainment Arts and Seoul Electronics Telecom, you can compare the effects of market volatilities on Barunson Entertainment and Seoul Electronics 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 Barunson Entertainment with a short position of Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barunson Entertainment and Seoul Electronics.
Diversification Opportunities for Barunson Entertainment and Seoul Electronics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barunson and Seoul is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Barunson Entertainment Arts and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom and Barunson Entertainment 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 Barunson Entertainment Arts are associated (or correlated) with Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of Barunson Entertainment i.e., Barunson Entertainment and Seoul Electronics go up and down completely randomly.
Pair Corralation between Barunson Entertainment and Seoul Electronics
Assuming the 90 days trading horizon Barunson Entertainment Arts is expected to under-perform the Seoul Electronics. In addition to that, Barunson Entertainment is 1.0 times more volatile than Seoul Electronics Telecom. It trades about -0.07 of its total potential returns per unit of risk. Seoul Electronics Telecom is currently generating about -0.07 per unit of volatility. If you would invest 61,900 in Seoul Electronics Telecom on September 3, 2024 and sell it today you would lose (38,200) from holding Seoul Electronics Telecom or give up 61.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barunson Entertainment Arts vs. Seoul Electronics Telecom
Performance |
| Timeline |
| Barunson Entertainment |
| Seoul Electronics Telecom |
Barunson Entertainment and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barunson Entertainment and Seoul Electronics
The main advantage of trading using opposite Barunson Entertainment and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barunson Entertainment position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' long position.| Barunson Entertainment vs. Daou Technology | Barunson Entertainment vs. Finebesteel | Barunson Entertainment vs. Dongil Steel Co | Barunson Entertainment vs. HB Technology TD |
| Seoul Electronics vs. DC Media Co | Seoul Electronics vs. KB Financial Group | Seoul Electronics vs. Barunson Entertainment Arts | Seoul Electronics vs. Tamul Multimedia 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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