Correlation Between Humasis and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Humasis and Bosung Power 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 Humasis and Bosung Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humasis Co and Bosung Power Technology, you can compare the effects of market volatilities on Humasis and Bosung Power 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 Humasis with a short position of Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humasis and Bosung Power.
Diversification Opportunities for Humasis and Bosung Power
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humasis and Bosung is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology and Humasis 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 Humasis Co are associated (or correlated) with Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Humasis i.e., Humasis and Bosung Power go up and down completely randomly.
Pair Corralation between Humasis and Bosung Power
Assuming the 90 days trading horizon Humasis Co is expected to generate 1.43 times more return on investment than Bosung Power. However, Humasis is 1.43 times more volatile than Bosung Power Technology. It trades about -0.13 of its potential returns per unit of risk. Bosung Power Technology is currently generating about -0.21 per unit of risk. If you would invest 203,500 in Humasis Co on September 19, 2024 and sell it today you would lose (27,300) from holding Humasis Co or give up 13.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Humasis Co vs. Bosung Power Technology
Performance |
| Timeline |
| Humasis |
| Bosung Power Technology |
Humasis and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humasis and Bosung Power
The main advantage of trading using opposite Humasis and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humasis position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.The idea behind Humasis Co and Bosung Power Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bosung Power vs. Korea New Network | Bosung Power vs. Solution Advanced Technology | Bosung Power vs. Busan Industrial Co | Bosung Power vs. Busan Ind |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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