Correlation Between SS TECH and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both SS TECH 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 SS TECH and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Busan Industrial Co, you can compare the effects of market volatilities on SS TECH 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 SS TECH with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Busan Industrial.
Diversification Opportunities for SS TECH and Busan Industrial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 101490 and Busan is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and SS TECH 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 SS TECH 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 SS TECH i.e., SS TECH and Busan Industrial go up and down completely randomly.
Pair Corralation between SS TECH and Busan Industrial
Assuming the 90 days trading horizon SS TECH is expected to under-perform the Busan Industrial. In addition to that, SS TECH is 1.08 times more volatile than Busan Industrial Co. It trades about -0.09 of its total potential returns per unit of risk. Busan Industrial Co is currently generating about -0.01 per unit of volatility. If you would invest 6,350,000 in Busan Industrial Co on August 25, 2024 and sell it today you would lose (850,000) from holding Busan Industrial Co or give up 13.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Busan Industrial Co
Performance |
| Timeline |
| SS TECH |
| Busan Industrial |
SS TECH and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Busan Industrial
The main advantage of trading using opposite SS TECH and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH 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.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| Busan Industrial vs. Taeyang Metal Industrial | Busan Industrial vs. Lake Materials Co | Busan Industrial vs. Asiana Airlines | Busan Industrial vs. Ssangyong Materials Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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