Correlation Between Empire State and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Bosung Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Bosung Power Technology, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Bosung Power.
Diversification Opportunities for Empire State and Bosung Power
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Bosung is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty 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 Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Bosung Power go up and down completely randomly.
Pair Corralation between Empire State and Bosung Power
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.74 times more return on investment than Bosung Power. However, Empire State Realty is 1.36 times less risky than Bosung Power. It trades about 0.13 of its potential returns per unit of risk. Bosung Power Technology is currently generating about -0.12 per unit of risk. If you would invest 1,060 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Empire State Realty or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Empire State Realty vs. Bosung Power Technology
Performance |
| Timeline |
| Empire State Realty |
| Bosung Power Technology |
Empire State and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Bosung Power
The main advantage of trading using opposite Empire State and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Bosung Power vs. Korea New Network | Bosung Power vs. ICD Co | Bosung Power vs. DYPNF CoLtd | Bosung Power vs. Busan Industrial 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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