Correlation Between Industrial Bank and Samyoung Electronics
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Samyoung 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 Samyoung 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 Samyoung Electronics Co, you can compare the effects of market volatilities on Industrial Bank and Samyoung 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 Samyoung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Samyoung Electronics.
Diversification Opportunities for Industrial Bank and Samyoung Electronics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and Samyoung is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Samyoung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyoung 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 Samyoung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyoung Electronics has no effect on the direction of Industrial Bank i.e., Industrial Bank and Samyoung Electronics go up and down completely randomly.
Pair Corralation between Industrial Bank and Samyoung Electronics
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.76 times more return on investment than Samyoung Electronics. However, Industrial Bank is 1.32 times less risky than Samyoung Electronics. It trades about 0.07 of its potential returns per unit of risk. Samyoung Electronics Co is currently generating about 0.02 per unit of risk. If you would invest 983,876 in Industrial Bank on October 14, 2024 and sell it today you would earn a total of 481,124 from holding Industrial Bank or generate 48.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Samyoung Electronics Co
Performance |
| Timeline |
| Industrial Bank |
| Samyoung Electronics |
Industrial Bank and Samyoung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Samyoung Electronics
The main advantage of trading using opposite Industrial Bank and Samyoung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Samyoung 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 Samyoung Electronics will offset losses from the drop in Samyoung Electronics' long position.| Industrial Bank vs. Namhwa Industrial Co | Industrial Bank vs. Hyundai Industrial Co | Industrial Bank vs. Lotte Non Life Insurance | Industrial Bank vs. Daesung Industrial Co |
| Samyoung Electronics vs. Hana Financial | Samyoung Electronics vs. Mobile Appliance | Samyoung Electronics vs. Industrial Bank | Samyoung Electronics vs. Lotte Non Life Insurance |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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