Correlation Between Industrial Bank and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Youngsin Metal 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 Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Youngsin Metal Industrial, you can compare the effects of market volatilities on Industrial Bank and Youngsin Metal 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 Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Youngsin Metal.
Diversification Opportunities for Industrial Bank and Youngsin Metal
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and Youngsin is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial 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 Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Industrial Bank i.e., Industrial Bank and Youngsin Metal go up and down completely randomly.
Pair Corralation between Industrial Bank and Youngsin Metal
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.36 times more return on investment than Youngsin Metal. However, Industrial Bank is 2.78 times less risky than Youngsin Metal. It trades about 0.19 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.29 per unit of risk. If you would invest 1,446,000 in Industrial Bank on August 31, 2024 and sell it today you would earn a total of 63,000 from holding Industrial Bank or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Industrial Bank |
| Youngsin Metal Industrial |
Industrial Bank and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Youngsin Metal
The main advantage of trading using opposite Industrial Bank and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Industrial Bank vs. Hannong Chemicals | Industrial Bank vs. EBEST Investment Securities | Industrial Bank vs. DSC Investment | Industrial Bank vs. E Investment Development |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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