Correlation Between Okins Electronics and Busan Ind
Can any of the company-specific risk be diversified away by investing in both Okins Electronics 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 Okins Electronics and Busan Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okins Electronics Co and Busan Ind, you can compare the effects of market volatilities on Okins Electronics 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 Okins Electronics with a short position of Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okins Electronics and Busan Ind.
Diversification Opportunities for Okins Electronics and Busan Ind
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Okins and Busan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Okins Electronics Co and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind and Okins Electronics 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 Okins Electronics 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 Okins Electronics i.e., Okins Electronics and Busan Ind go up and down completely randomly.
Pair Corralation between Okins Electronics and Busan Ind
Assuming the 90 days trading horizon Okins Electronics Co is expected to under-perform the Busan Ind. In addition to that, Okins Electronics is 1.81 times more volatile than Busan Ind. It trades about -0.04 of its total potential returns per unit of risk. Busan Ind is currently generating about 0.0 per unit of volatility. If you would invest 7,380,455 in Busan Ind on September 2, 2024 and sell it today you would lose (1,240,455) from holding Busan Ind or give up 16.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okins Electronics Co vs. Busan Ind
Performance |
| Timeline |
| Okins Electronics |
| Busan Ind |
Okins Electronics and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okins Electronics and Busan Ind
The main advantage of trading using opposite Okins Electronics and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okins Electronics 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.| Okins Electronics vs. Dongsin Engineering Construction | Okins Electronics vs. Doosan Fuel Cell | Okins Electronics vs. Daishin Balance 1 | Okins Electronics vs. Total Soft Bank |
| Busan Ind vs. Daelim Industrial Co | Busan Ind vs. Samhwa Paint Industrial | Busan Ind vs. Daesung Hi Tech Co | Busan Ind vs. Korea Computer |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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