Correlation Between ECSTELECOM and Busan Ind
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and Busan Ind 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 ECSTELECOM and Busan Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and Busan Ind, you can compare the effects of market volatilities on ECSTELECOM and Busan Ind 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 ECSTELECOM with a short position of Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and Busan Ind.
Diversification Opportunities for ECSTELECOM and Busan Ind
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ECSTELECOM and Busan is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and Busan Ind go up and down completely randomly.
Pair Corralation between ECSTELECOM and Busan Ind
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the Busan Ind. But the stock apears to be less risky and, when comparing its historical volatility, ECSTELECOM Co is 6.65 times less risky than Busan Ind. The stock trades about -0.24 of its potential returns per unit of risk. The Busan Ind is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,600,000 in Busan Ind on September 1, 2024 and sell it today you would earn a total of 540,000 from holding Busan Ind or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. Busan Ind
Performance |
| Timeline |
| ECSTELECOM |
| Busan Ind |
ECSTELECOM and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and Busan Ind
The main advantage of trading using opposite ECSTELECOM and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, Busan Ind 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 Ind will offset losses from the drop in Busan Ind's long position.| ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Mirae Asset Daewoo | ECSTELECOM vs. Finebesteel |
| Busan Ind vs. ABCO Electronics Co | Busan Ind vs. KG Eco Technology | Busan Ind vs. PJ Electronics Co | Busan Ind vs. DAEDUCK ELECTRONICS CoLtd |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |