Correlation Between Busan Ind and Insun Environment
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Insun Environment 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 Busan Ind and Insun Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Insun Environment New, you can compare the effects of market volatilities on Busan Ind and Insun Environment 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 Busan Ind with a short position of Insun Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Insun Environment.
Diversification Opportunities for Busan Ind and Insun Environment
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Busan and Insun is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New and Busan Ind 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 Busan Ind are associated (or correlated) with Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of Busan Ind i.e., Busan Ind and Insun Environment go up and down completely randomly.
Pair Corralation between Busan Ind and Insun Environment
Assuming the 90 days trading horizon Busan Ind is expected to generate 2.3 times more return on investment than Insun Environment. However, Busan Ind is 2.3 times more volatile than Insun Environment New. It trades about 0.2 of its potential returns per unit of risk. Insun Environment New is currently generating about 0.12 per unit of risk. If you would invest 5,630,000 in Busan Ind on September 26, 2024 and sell it today you would earn a total of 2,090,000 from holding Busan Ind or generate 37.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Busan Ind vs. Insun Environment New
Performance |
Timeline |
Busan Ind |
Insun Environment New |
Busan Ind and Insun Environment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Busan Ind and Insun Environment
The main advantage of trading using opposite Busan Ind and Insun Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Insun Environment 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 Insun Environment will offset losses from the drop in Insun Environment's long position.Busan Ind vs. Woorim Machinery Co | Busan Ind vs. CU Medical Systems | Busan Ind vs. Hyundai Engineering Construction | Busan Ind vs. Seoul Food Industrial |
Insun Environment vs. AptaBio Therapeutics | Insun Environment vs. Wonbang Tech Co | Insun Environment vs. Busan Industrial Co | Insun Environment vs. Busan Ind |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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