Correlation Between Barunson Entertainment and A Tech
Can any of the company-specific risk be diversified away by investing in both Barunson Entertainment and A Tech 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 A Tech 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 A Tech Solution Co, you can compare the effects of market volatilities on Barunson Entertainment and A Tech 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 A Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barunson Entertainment and A Tech.
Diversification Opportunities for Barunson Entertainment and A Tech
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barunson and 071670 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Barunson Entertainment Arts and A Tech Solution Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Tech Solution 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 A Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Tech Solution has no effect on the direction of Barunson Entertainment i.e., Barunson Entertainment and A Tech go up and down completely randomly.
Pair Corralation between Barunson Entertainment and A Tech
Assuming the 90 days trading horizon Barunson Entertainment Arts is expected to under-perform the A Tech. But the stock apears to be less risky and, when comparing its historical volatility, Barunson Entertainment Arts is 1.46 times less risky than A Tech. The stock trades about -0.2 of its potential returns per unit of risk. The A Tech Solution Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 626,000 in A Tech Solution Co on August 25, 2024 and sell it today you would lose (30,000) from holding A Tech Solution Co or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barunson Entertainment Arts vs. A Tech Solution Co
Performance |
| Timeline |
| Barunson Entertainment |
| A Tech Solution |
Barunson Entertainment and A Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barunson Entertainment and A Tech
The main advantage of trading using opposite Barunson Entertainment and A Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barunson Entertainment position performs unexpectedly, A Tech 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 A Tech will offset losses from the drop in A Tech's long position.| Barunson Entertainment vs. Daiyang Metal Co | Barunson Entertainment vs. Vitzro Tech Co | Barunson Entertainment vs. Hankook Furniture Co | Barunson Entertainment vs. Dongbang Transport Logistics |
| A Tech vs. Samsung Electronics Co | A Tech vs. Samsung Electronics Co | A Tech vs. Hyundai Motor Co | A Tech vs. Hyundai Motor |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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