Correlation Between BGF Retail and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Korea Shipbuilding 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 BGF Retail and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on BGF Retail and Korea Shipbuilding 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 BGF Retail with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Korea Shipbuilding.
Diversification Opportunities for BGF Retail and Korea Shipbuilding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BGF and Korea is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and BGF Retail 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 BGF Retail Co are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of BGF Retail i.e., BGF Retail and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between BGF Retail and Korea Shipbuilding
Assuming the 90 days trading horizon BGF Retail Co is expected to generate 0.55 times more return on investment than Korea Shipbuilding. However, BGF Retail Co is 1.81 times less risky than Korea Shipbuilding. It trades about 0.04 of its potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about -0.01 per unit of risk. If you would invest 10,260,000 in BGF Retail Co on October 28, 2024 and sell it today you would earn a total of 90,000 from holding BGF Retail Co or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| BGF Retail |
| Korea Shipbuilding |
BGF Retail and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Korea Shipbuilding
The main advantage of trading using opposite BGF Retail and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| BGF Retail vs. NICE Information Service | BGF Retail vs. Insung Information Co | BGF Retail vs. Koryo Credit Information | BGF Retail vs. DataSolution |
| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. KB Financial Group | Korea Shipbuilding vs. Shinhan Financial Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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