Correlation Between I-Components and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both I-Components and Busan Industrial 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 I-Components and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between i Components Co and Busan Industrial Co, you can compare the effects of market volatilities on I-Components and Busan Industrial 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 I-Components with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of I-Components and Busan Industrial.
Diversification Opportunities for I-Components and Busan Industrial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between I-Components and Busan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding i Components Co and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and I-Components 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 i Components Co are associated (or correlated) with Busan Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Industrial has no effect on the direction of I-Components i.e., I-Components and Busan Industrial go up and down completely randomly.
Pair Corralation between I-Components and Busan Industrial
Assuming the 90 days trading horizon i Components Co is expected to under-perform the Busan Industrial. But the stock apears to be less risky and, when comparing its historical volatility, i Components Co is 4.39 times less risky than Busan Industrial. The stock trades about -0.03 of its potential returns per unit of risk. The Busan Industrial Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,130,000 in Busan Industrial Co on September 26, 2024 and sell it today you would earn a total of 2,590,000 from holding Busan Industrial Co or generate 50.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
i Components Co vs. Busan Industrial Co
Performance |
Timeline |
i Components |
Busan Industrial |
I-Components and Busan Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with I-Components and Busan Industrial
The main advantage of trading using opposite I-Components and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I-Components position performs unexpectedly, Busan Industrial 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 Busan Industrial will offset losses from the drop in Busan Industrial's long position.I-Components vs. Samsung Electronics Co | I-Components vs. Samsung Electronics Co | I-Components vs. LG Energy Solution | I-Components vs. SK Hynix |
Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Wonbang Tech Co | Busan Industrial vs. Busan Ind | Busan Industrial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |