Correlation Between Industrial Bank and Sam A
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Sam A 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 Sam A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Sam A Pharm Co, you can compare the effects of market volatilities on Industrial Bank and Sam A 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 Sam A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Sam A.
Diversification Opportunities for Industrial Bank and Sam A
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Sam is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Sam A Pharm Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam A Pharm 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 Sam A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam A Pharm has no effect on the direction of Industrial Bank i.e., Industrial Bank and Sam A go up and down completely randomly.
Pair Corralation between Industrial Bank and Sam A
Assuming the 90 days trading horizon Industrial Bank is expected to generate 6.94 times less return on investment than Sam A. But when comparing it to its historical volatility, Industrial Bank is 1.55 times less risky than Sam A. It trades about 0.11 of its potential returns per unit of risk. Sam A Pharm Co is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,491,217 in Sam A Pharm Co on October 9, 2024 and sell it today you would earn a total of 259,783 from holding Sam A Pharm Co or generate 17.42% 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. Sam A Pharm Co
Performance |
| Timeline |
| Industrial Bank |
| Sam A Pharm |
Industrial Bank and Sam A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Sam A
The main advantage of trading using opposite Industrial Bank and Sam A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Sam A 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 Sam A will offset losses from the drop in Sam A's long position.| Industrial Bank vs. UJU Electronics Co | Industrial Bank vs. System and Application | Industrial Bank vs. Ssangyong Information Communication | Industrial Bank vs. Samji Electronics 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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