Correlation Between Busan Industrial and KIM KINDEX
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and KIM KINDEX 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 KIM KINDEX 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 KIM KINDEX Japan, you can compare the effects of market volatilities on Busan Industrial and KIM KINDEX 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 KIM KINDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and KIM KINDEX.
Diversification Opportunities for Busan Industrial and KIM KINDEX
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Busan and KIM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and KIM KINDEX Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIM KINDEX Japan 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 KIM KINDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIM KINDEX Japan has no effect on the direction of Busan Industrial i.e., Busan Industrial and KIM KINDEX go up and down completely randomly.
Pair Corralation between Busan Industrial and KIM KINDEX
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 10.71 times more return on investment than KIM KINDEX. However, Busan Industrial is 10.71 times more volatile than KIM KINDEX Japan. It trades about 0.2 of its potential returns per unit of risk. KIM KINDEX Japan is currently generating about 0.08 per unit of risk. If you would invest 5,630,000 in Busan Industrial Co on September 25, 2024 and sell it today you would earn a total of 2,090,000 from holding Busan Industrial Co or generate 37.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Busan Industrial Co vs. KIM KINDEX Japan
Performance |
Timeline |
Busan Industrial |
KIM KINDEX Japan |
Busan Industrial and KIM KINDEX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Busan Industrial and KIM KINDEX
The main advantage of trading using opposite Busan Industrial and KIM KINDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, KIM KINDEX 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 KIM KINDEX will offset losses from the drop in KIM KINDEX's long position.Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Wonbang Tech Co | Busan Industrial vs. Busan Ind | Busan Industrial vs. Mirae Asset Daewoo |
KIM KINDEX vs. 456680 | KIM KINDEX vs. Busan Industrial Co | KIM KINDEX vs. Busan Ind | KIM KINDEX vs. Mirae Asset Daewoo |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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