Correlation Between Industrial Bank and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Sangsangin Investment 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 Industrial Bank and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Sangsangin Investment Securities, you can compare the effects of market volatilities on Industrial Bank and Sangsangin Investment 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 Industrial Bank with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Sangsangin Investment.
Diversification Opportunities for Industrial Bank and Sangsangin Investment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Sangsangin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Industrial Bank 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 Industrial Bank are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Industrial Bank i.e., Industrial Bank and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Industrial Bank and Sangsangin Investment
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.63 times more return on investment than Sangsangin Investment. However, Industrial Bank is 1.59 times less risky than Sangsangin Investment. It trades about 0.08 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.06 per unit of risk. If you would invest 930,268 in Industrial Bank on August 28, 2024 and sell it today you would earn a total of 534,732 from holding Industrial Bank or generate 57.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Industrial Bank |
| Sangsangin Investment |
Industrial Bank and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Sangsangin Investment
The main advantage of trading using opposite Industrial Bank and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Industrial Bank vs. Shinhan Inverse Copper | Industrial Bank vs. Insung Information Co | Industrial Bank vs. Bohae Brewery | Industrial Bank vs. Shinsegae Information Communication |
| Sangsangin Investment vs. Korea New Network | Sangsangin Investment vs. Dong A Eltek | Sangsangin Investment vs. Dreamus Company | Sangsangin Investment vs. SK Bioscience Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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