Correlation Between Bosung Power and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both Bosung Power and Phoenix Materials 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 Bosung Power and Phoenix Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bosung Power Technology and Phoenix Materials Co, you can compare the effects of market volatilities on Bosung Power and Phoenix Materials 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 Bosung Power with a short position of Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and Phoenix Materials.
Diversification Opportunities for Bosung Power and Phoenix Materials
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bosung and Phoenix is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials and Bosung Power 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 Bosung Power Technology are associated (or correlated) with Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of Bosung Power i.e., Bosung Power and Phoenix Materials go up and down completely randomly.
Pair Corralation between Bosung Power and Phoenix Materials
Assuming the 90 days trading horizon Bosung Power Technology is expected to generate 0.4 times more return on investment than Phoenix Materials. However, Bosung Power Technology is 2.48 times less risky than Phoenix Materials. It trades about 0.05 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.06 per unit of risk. If you would invest 258,500 in Bosung Power Technology on December 25, 2024 and sell it today you would earn a total of 12,500 from holding Bosung Power Technology or generate 4.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bosung Power Technology vs. Phoenix Materials Co
Performance |
Timeline |
Bosung Power Technology |
Phoenix Materials |
Bosung Power and Phoenix Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bosung Power and Phoenix Materials
The main advantage of trading using opposite Bosung Power and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.Bosung Power vs. DONGKUK TED METAL | Bosung Power vs. Daehan Synthetic Fiber | Bosung Power vs. Hanjoo Light Metal | Bosung Power vs. Daejung Chemicals Metals |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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