Correlation Between INSUN Environmental and Air Busan
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on INSUN Environmental and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and Air Busan.
Diversification Opportunities for INSUN Environmental and Air Busan
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INSUN and Air is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of INSUN Environmental i.e., INSUN Environmental and Air Busan go up and down completely randomly.
Pair Corralation between INSUN Environmental and Air Busan
Assuming the 90 days trading horizon INSUN Environmental New is expected to generate 1.34 times more return on investment than Air Busan. However, INSUN Environmental is 1.34 times more volatile than Air Busan Co. It trades about 0.32 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.07 per unit of risk. If you would invest 519,000 in INSUN Environmental New on October 17, 2024 and sell it today you would earn a total of 49,000 from holding INSUN Environmental New or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. Air Busan Co
Performance |
| Timeline |
| INSUN Environmental New |
| Air Busan |
INSUN Environmental and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and Air Busan
The main advantage of trading using opposite INSUN Environmental and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan'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 |
| Air Busan vs. Hwangkum Steel Technology | Air Busan vs. Finebesteel | Air Busan vs. FNSTech Co | Air Busan vs. Insun Environment New |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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