Correlation Between Busan Industrial and Hironic
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Hironic 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 Hironic 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 Hironic Co, you can compare the effects of market volatilities on Busan Industrial and Hironic 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 Hironic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Hironic.
Diversification Opportunities for Busan Industrial and Hironic
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Busan and Hironic is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Hironic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hironic 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 Hironic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hironic has no effect on the direction of Busan Industrial i.e., Busan Industrial and Hironic go up and down completely randomly.
Pair Corralation between Busan Industrial and Hironic
Assuming the 90 days trading horizon Busan Industrial is expected to generate 2.91 times less return on investment than Hironic. But when comparing it to its historical volatility, Busan Industrial Co is 1.3 times less risky than Hironic. It trades about 0.01 of its potential returns per unit of risk. Hironic Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 536,363 in Hironic Co on October 3, 2024 and sell it today you would earn a total of 93,637 from holding Hironic Co or generate 17.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Busan Industrial Co vs. Hironic Co
Performance |
Timeline |
Busan Industrial |
Hironic |
Busan Industrial and Hironic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Busan Industrial and Hironic
The main advantage of trading using opposite Busan Industrial and Hironic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Hironic 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 Hironic will offset losses from the drop in Hironic's long position.Busan Industrial vs. Daiyang Metal Co | Busan Industrial vs. Cheryong Industrial CoLtd | Busan Industrial vs. Seoyon Topmetal Co | Busan Industrial vs. Kakao Games Corp |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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