Correlation Between KT Submarine and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both KT Submarine 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 KT Submarine and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Telecom and Busan Industrial Co, you can compare the effects of market volatilities on KT Submarine 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 KT Submarine with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and Busan Industrial.
Diversification Opportunities for KT Submarine and Busan Industrial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 060370 and Busan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and KT Submarine 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 KT Submarine Telecom 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 KT Submarine i.e., KT Submarine and Busan Industrial go up and down completely randomly.
Pair Corralation between KT Submarine and Busan Industrial
Assuming the 90 days trading horizon KT Submarine Telecom is expected to generate 1.02 times more return on investment than Busan Industrial. However, KT Submarine is 1.02 times more volatile than Busan Industrial Co. It trades about 0.27 of its potential returns per unit of risk. Busan Industrial Co is currently generating about -0.16 per unit of risk. If you would invest 1,490,000 in KT Submarine Telecom on October 17, 2024 and sell it today you would earn a total of 180,000 from holding KT Submarine Telecom or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Submarine Telecom vs. Busan Industrial Co
Performance |
| Timeline |
| KT Submarine Telecom |
| Busan Industrial |
KT Submarine and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and Busan Industrial
The main advantage of trading using opposite KT Submarine and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine 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.| KT Submarine vs. Inzi Display CoLtd | KT Submarine vs. Vissem Electronics Co | KT Submarine vs. PlayD Co | KT Submarine vs. Samji Electronics Co |
| Busan Industrial vs. Hanjin Transportation Co | Busan Industrial vs. Korea Alcohol Industrial | Busan Industrial vs. SV Investment | Busan Industrial vs. Woori Technology Investment |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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