Correlation Between KBSTAR HealthCare and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both KBSTAR HealthCare 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 KBSTAR HealthCare and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR HealthCare Fixed and Busan Industrial Co, you can compare the effects of market volatilities on KBSTAR HealthCare 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 KBSTAR HealthCare with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR HealthCare and Busan Industrial.
Diversification Opportunities for KBSTAR HealthCare and Busan Industrial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBSTAR and Busan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR HealthCare Fixed and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and KBSTAR HealthCare 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 KBSTAR HealthCare Fixed 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 KBSTAR HealthCare i.e., KBSTAR HealthCare and Busan Industrial go up and down completely randomly.
Pair Corralation between KBSTAR HealthCare and Busan Industrial
Assuming the 90 days trading horizon KBSTAR HealthCare Fixed is expected to generate 0.23 times more return on investment than Busan Industrial. However, KBSTAR HealthCare Fixed is 4.43 times less risky than Busan Industrial. It trades about 0.04 of its potential returns per unit of risk. Busan Industrial Co is currently generating about -0.01 per unit of risk. If you would invest 1,052,876 in KBSTAR HealthCare Fixed on September 2, 2024 and sell it today you would earn a total of 141,124 from holding KBSTAR HealthCare Fixed or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR HealthCare Fixed vs. Busan Industrial Co
Performance |
| Timeline |
| KBSTAR HealthCare Fixed |
| Busan Industrial |
KBSTAR HealthCare and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR HealthCare and Busan Industrial
The main advantage of trading using opposite KBSTAR HealthCare and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR HealthCare 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.| KBSTAR HealthCare vs. Busan Industrial Co | KBSTAR HealthCare vs. Busan Ind | KBSTAR HealthCare vs. Mirae Asset Daewoo | KBSTAR HealthCare vs. Shinhan WTI Futures |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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