Correlation Between Industrial Bank and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Shinil Electronics 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 Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Shinil Electronics Co, you can compare the effects of market volatilities on Industrial Bank and Shinil Electronics 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 Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Shinil Electronics.
Diversification Opportunities for Industrial Bank and Shinil Electronics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Industrial and Shinil is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics 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 Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Industrial Bank i.e., Industrial Bank and Shinil Electronics go up and down completely randomly.
Pair Corralation between Industrial Bank and Shinil Electronics
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.95 times more return on investment than Shinil Electronics. However, Industrial Bank is 1.05 times less risky than Shinil Electronics. It trades about 0.08 of its potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.06 per unit of risk. If you would invest 968,007 in Industrial Bank on October 30, 2024 and sell it today you would earn a total of 538,993 from holding Industrial Bank or generate 55.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Shinil Electronics Co
Performance |
| Timeline |
| Industrial Bank |
| Shinil Electronics |
Industrial Bank and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Shinil Electronics
The main advantage of trading using opposite Industrial Bank and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| Industrial Bank vs. BIT Computer Co | Industrial Bank vs. V One Tech Co | Industrial Bank vs. KMH Hitech Co | Industrial Bank vs. Dongwoon Anatech Co |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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