Correlation Between KIM KINDEX and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both KIM KINDEX 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 KIM KINDEX and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIM KINDEX Japan and Busan Industrial Co, you can compare the effects of market volatilities on KIM KINDEX 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 KIM KINDEX with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIM KINDEX and Busan Industrial.
Diversification Opportunities for KIM KINDEX and Busan Industrial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between KIM and Busan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding KIM KINDEX Japan and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and KIM KINDEX 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 KIM KINDEX Japan 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 KIM KINDEX i.e., KIM KINDEX and Busan Industrial go up and down completely randomly.
Pair Corralation between KIM KINDEX and Busan Industrial
Assuming the 90 days trading horizon KIM KINDEX is expected to generate 21.59 times less return on investment than Busan Industrial. But when comparing it to its historical volatility, KIM KINDEX Japan is 4.09 times less risky than Busan Industrial. It trades about 0.01 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,920,000 in Busan Industrial Co on August 31, 2024 and sell it today you would earn a total of 450,000 from holding Busan Industrial Co or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KIM KINDEX Japan vs. Busan Industrial Co
Performance |
| Timeline |
| KIM KINDEX Japan |
| Busan Industrial |
KIM KINDEX and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIM KINDEX and Busan Industrial
The main advantage of trading using opposite KIM KINDEX and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIM KINDEX 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.| KIM KINDEX vs. KIM KINDEX Treasury | KIM KINDEX vs. KIM KINDEX 200 | KIM KINDEX vs. KIM KINDEX KOSPI | KIM KINDEX vs. KIM KINDEX Vietnam |
| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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