Correlation Between Settlebank and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both Settlebank 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 Settlebank and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and Busan Industrial Co, you can compare the effects of market volatilities on Settlebank 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 Settlebank with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and Busan Industrial.
Diversification Opportunities for Settlebank and Busan Industrial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Settlebank and Busan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and Settlebank 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 Settlebank 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 Settlebank i.e., Settlebank and Busan Industrial go up and down completely randomly.
Pair Corralation between Settlebank and Busan Industrial
Assuming the 90 days trading horizon Settlebank is expected to under-perform the Busan Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Settlebank is 1.96 times less risky than Busan Industrial. The stock trades about -0.06 of its potential returns per unit of risk. The Busan Industrial Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,380,000 in Busan Industrial Co on August 25, 2024 and sell it today you would earn a total of 120,000 from holding Busan Industrial Co or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Settlebank vs. Busan Industrial Co
Performance |
| Timeline |
| Settlebank |
| Busan Industrial |
Settlebank and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and Busan Industrial
The main advantage of trading using opposite Settlebank and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank 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.| Settlebank vs. Playgram Co | Settlebank vs. MediaZen | Settlebank vs. DC Media Co | Settlebank vs. Woori Technology |
| Busan Industrial vs. Cuckoo Electronics Co | Busan Industrial vs. Samwha Electronics Co | Busan Industrial vs. Sungwoo Electronics Co | Busan Industrial vs. Atinum Investment Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |