Correlation Between INSUN Environmental and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental 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 INSUN Environmental and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSUN Environmental New and Busan Industrial Co, you can compare the effects of market volatilities on INSUN Environmental 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 INSUN Environmental with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and Busan Industrial.
Diversification Opportunities for INSUN Environmental and Busan Industrial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INSUN and Busan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and INSUN Environmental 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 INSUN Environmental New 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 INSUN Environmental i.e., INSUN Environmental and Busan Industrial go up and down completely randomly.
Pair Corralation between INSUN Environmental and Busan Industrial
Assuming the 90 days trading horizon INSUN Environmental is expected to generate 3.86 times less return on investment than Busan Industrial. But when comparing it to its historical volatility, INSUN Environmental New is 2.3 times less risky than Busan Industrial. It trades about 0.12 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,630,000 in Busan Industrial Co on September 25, 2024 and sell it today you would earn a total of 2,090,000 from holding Busan Industrial Co or generate 37.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. Busan Industrial Co
Performance |
| Timeline |
| INSUN Environmental New |
| Busan Industrial |
INSUN Environmental and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and Busan Industrial
The main advantage of trading using opposite INSUN Environmental and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental 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.| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING Co |
| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Wonbang Tech Co | Busan Industrial vs. Busan Ind | Busan Industrial vs. Mirae Asset Daewoo |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stocks Directory Find actively traded stocks across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |