Correlation Between Busan Industrial and Samsung Card

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

By analyzing existing cross correlation between Busan Industrial Co and Samsung Card Co, you can compare the effects of market volatilities on Busan Industrial and Samsung Card 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 Industrial with a short position of Samsung Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Samsung Card.

Diversification Opportunities for Busan Industrial and Samsung Card

0.0

Correlation Coefficient

Busan Industrial  Samsung Card

Pay attention - limited upside

The 3 months correlation between Busan and Samsung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Samsung Card Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Card and Busan Industrial 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 Industrial Co are associated (or correlated) with Samsung Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Card has no effect on the direction of Busan Industrial i.e., Busan Industrial and Samsung Card go up and down completely randomly.

Pair Corralation between Busan Industrial and Samsung Card

If you would invest  5,003,311  in Busan Industrial Co on October 4, 2024 and sell it today you would earn a total of  2,696,689  from holding Busan Industrial Co or generate 53.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Busan Industrial Co  vs.  Samsung Card Co

Busan Industrial

Risk-Adjusted Performance

11 of 100

Good

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

Samsung Card

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Card Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samsung Card 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 Industrial and Samsung Card

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

The idea behind Busan Industrial Co and Samsung Card Co 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.