Correlation Between Busan Ind and 476810

Can any of the company-specific risk be diversified away by investing in both Busan Ind and 476810 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 476810 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Busan Ind and 476810, you can compare the effects of market volatilities on Busan Ind and 476810 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 476810. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and 476810.

Diversification Opportunities for Busan Ind and 476810

0.84

Correlation Coefficient

Busan Ind  476810

Very poor diversification

The 3 months correlation between Busan and 476810 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and 476810 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 476810 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 476810. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 476810 has no effect on the direction of Busan Ind i.e., Busan Ind and 476810 go up and down completely randomly.

Pair Corralation between Busan Ind and 476810

Assuming the 90 days trading horizon Busan Ind is expected to generate 148.06 times more return on investment than 476810. However, Busan Ind is 148.06 times more volatile than 476810. It trades about 0.22 of its potential returns per unit of risk. 476810 is currently generating about 0.34 per unit of risk. If you would invest  5,630,000  in Busan Ind on September 24, 2024 and sell it today you would earn a total of  2,230,000  from holding Busan Ind or generate 39.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Busan Ind  vs.  476810

Busan Ind

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Busan Ind are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Busan Ind sustained solid returns over the last few months and may actually be approaching a breakup point.

476810

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 476810 are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 476810 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Busan Ind and 476810

The main advantage of trading using opposite Busan Ind and 476810 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, 476810 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 476810 will offset losses from the drop in 476810's long position.

The idea behind Busan Ind and 476810 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.