Correlation Between Oscotec and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both Oscotec 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 Oscotec and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oscotec and Busan Industrial Co, you can compare the effects of market volatilities on Oscotec 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 Oscotec with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oscotec and Busan Industrial.
Diversification Opportunities for Oscotec and Busan Industrial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oscotec and Busan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Oscotec and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and Oscotec 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 Oscotec 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 Oscotec i.e., Oscotec and Busan Industrial go up and down completely randomly.
Pair Corralation between Oscotec and Busan Industrial
Assuming the 90 days trading horizon Oscotec is expected to under-perform the Busan Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Oscotec is 1.21 times less risky than Busan Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The Busan Industrial Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,551,483 in Busan Industrial Co on October 13, 2024 and sell it today you would earn a total of 2,138,517 from holding Busan Industrial Co or generate 38.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oscotec vs. Busan Industrial Co
Performance |
| Timeline |
| Oscotec |
| Busan Industrial |
Oscotec and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oscotec and Busan Industrial
The main advantage of trading using opposite Oscotec and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oscotec 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.The idea behind Oscotec and Busan Industrial Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Busan Industrial vs. DataSolution | Busan Industrial vs. Samyang Foods Co | Busan Industrial vs. Haitai Confectionery Foods | Busan Industrial vs. NICE Information Service |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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