Correlation Between InBody CoLtd and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both InBody CoLtd 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 InBody CoLtd and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InBody CoLtd and Busan Industrial Co, you can compare the effects of market volatilities on InBody CoLtd 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 InBody CoLtd with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of InBody CoLtd and Busan Industrial.
Diversification Opportunities for InBody CoLtd and Busan Industrial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between InBody and Busan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding InBody CoLtd and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and InBody CoLtd 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 InBody CoLtd 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 InBody CoLtd i.e., InBody CoLtd and Busan Industrial go up and down completely randomly.
Pair Corralation between InBody CoLtd and Busan Industrial
Assuming the 90 days trading horizon InBody CoLtd is expected to generate 1.06 times more return on investment than Busan Industrial. However, InBody CoLtd is 1.06 times more volatile than Busan Industrial Co. It trades about 0.18 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.17 per unit of risk. If you would invest 2,245,000 in InBody CoLtd on October 26, 2024 and sell it today you would earn a total of 150,000 from holding InBody CoLtd or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InBody CoLtd vs. Busan Industrial Co
Performance |
| Timeline |
| InBody CoLtd |
| Busan Industrial |
InBody CoLtd and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InBody CoLtd and Busan Industrial
The main advantage of trading using opposite InBody CoLtd and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InBody CoLtd 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.| InBody CoLtd vs. Vieworks Co | InBody CoLtd vs. Genie Music | InBody CoLtd vs. Seegene | InBody CoLtd vs. Medy Tox |
| Busan Industrial vs. Lotte Data Communication | Busan Industrial vs. Seoyon Topmetal Co | Busan Industrial vs. LEENO Industrial | Busan Industrial vs. Dongil Metal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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