Correlation Between Wing Yip and Busan Ind
Can any of the company-specific risk be diversified away by investing in both Wing Yip and Busan Ind 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 Wing Yip and Busan Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wing Yip Food and Busan Ind, you can compare the effects of market volatilities on Wing Yip and Busan Ind 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 Wing Yip with a short position of Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wing Yip and Busan Ind.
Diversification Opportunities for Wing Yip and Busan Ind
Pay attention - limited upside
The 3 months correlation between Wing and Busan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind and Wing Yip 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 Wing Yip Food are associated (or correlated) with Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of Wing Yip i.e., Wing Yip and Busan Ind go up and down completely randomly.
Pair Corralation between Wing Yip and Busan Ind
Assuming the 90 days trading horizon Wing Yip is expected to generate 3.16 times less return on investment than Busan Ind. But when comparing it to its historical volatility, Wing Yip Food is 1.24 times less risky than Busan Ind. It trades about 0.01 of its potential returns per unit of risk. Busan Ind is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,700,000 in Busan Ind on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Busan Ind or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wing Yip Food vs. Busan Ind
Performance |
| Timeline |
| Wing Yip Food |
| Busan Ind |
Wing Yip and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wing Yip and Busan Ind
The main advantage of trading using opposite Wing Yip and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wing Yip position performs unexpectedly, Busan Ind 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 Ind will offset losses from the drop in Busan Ind's long position.| Wing Yip vs. Daejoo Electronic Materials | Wing Yip vs. Korea Electronic Certification | Wing Yip vs. InnoTherapy | Wing Yip vs. Samsung Life Insurance |
| Busan Ind vs. Ssangyong Information Communication | Busan Ind vs. E Investment Development | Busan Ind vs. Stic Investments | Busan Ind vs. Korea Investment Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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