Correlation Between Korea Refract and InfoBank
Can any of the company-specific risk be diversified away by investing in both Korea Refract and InfoBank 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 Korea Refract and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Refract and InfoBank, you can compare the effects of market volatilities on Korea Refract and InfoBank 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 Korea Refract with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refract and InfoBank.
Diversification Opportunities for Korea Refract and InfoBank
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and InfoBank is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refract and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Korea Refract 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 Korea Refract are associated (or correlated) with InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Korea Refract i.e., Korea Refract and InfoBank go up and down completely randomly.
Pair Corralation between Korea Refract and InfoBank
Assuming the 90 days trading horizon Korea Refract is expected to under-perform the InfoBank. But the stock apears to be less risky and, when comparing its historical volatility, Korea Refract is 1.44 times less risky than InfoBank. The stock trades about -0.06 of its potential returns per unit of risk. The InfoBank is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,312,652 in InfoBank on September 4, 2024 and sell it today you would lose (590,652) from holding InfoBank or give up 45.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Refract vs. InfoBank
Performance |
| Timeline |
| Korea Refract |
| InfoBank |
Korea Refract and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Refract and InfoBank
The main advantage of trading using opposite Korea Refract and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refract position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| Korea Refract vs. Tway Air Co | Korea Refract vs. Foodnamoo | Korea Refract vs. Raontech | Korea Refract vs. Konan Technology |
| InfoBank vs. Daeduck Electronics Co | InfoBank vs. Shinil Electronics Co | InfoBank vs. Okins Electronics Co | InfoBank vs. DSC 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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