Correlation Between Api Group and Busan Industrial

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

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

Diversification Opportunities for Api Group and Busan Industrial

0.19

Correlation Coefficient

Api Group  Busan Industrial

Average diversification

The 3 months correlation between Api and Busan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Api Group Corp and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and Api Group 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 Api Group Corp 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 Api Group i.e., Api Group and Busan Industrial go up and down completely randomly.

Pair Corralation between Api Group and Busan Industrial

Considering the 90-day investment horizon Api Group Corp is expected to under-perform the Busan Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Api Group Corp is 1.99 times less risky than Busan Industrial. The stock trades about -0.07 of its potential returns per unit of risk. The Busan Industrial Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,330,000  in Busan Industrial Co on June 21, 2024 and sell it today you would lose (290,000) from holding Busan Industrial Co or give up 5.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Api Group Corp  vs.  Busan Industrial Co

Api Group Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Api Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Busan Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Busan Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Busan Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Api Group and Busan Industrial

The main advantage of trading using opposite Api Group and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Api Group 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.

The idea behind Api Group Corp and Busan Industrial 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..