Correlation Between Industrial Bank and Dongil Steel
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Dongil Steel 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 Dongil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Dongil Steel Co, you can compare the effects of market volatilities on Industrial Bank and Dongil Steel 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 Dongil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Dongil Steel.
Diversification Opportunities for Industrial Bank and Dongil Steel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Dongil is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Dongil Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Steel 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 Dongil Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Steel has no effect on the direction of Industrial Bank i.e., Industrial Bank and Dongil Steel go up and down completely randomly.
Pair Corralation between Industrial Bank and Dongil Steel
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.91 times more return on investment than Dongil Steel. However, Industrial Bank is 1.09 times less risky than Dongil Steel. It trades about 0.04 of its potential returns per unit of risk. Dongil Steel Co is currently generating about -0.34 per unit of risk. If you would invest 1,433,000 in Industrial Bank on September 13, 2024 and sell it today you would earn a total of 30,000 from holding Industrial Bank or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Industrial Bank vs. Dongil Steel Co
Performance |
| Timeline |
| Industrial Bank |
| Dongil Steel |
Industrial Bank and Dongil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Dongil Steel
The main advantage of trading using opposite Industrial Bank and Dongil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Dongil Steel 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 Dongil Steel will offset losses from the drop in Dongil Steel's long position.| Industrial Bank vs. Nice Information Telecommunication | Industrial Bank vs. Lotte Data Communication | Industrial Bank vs. DataSolution | Industrial Bank vs. NICE Information Service |
| Dongil Steel vs. Keum Kang Steel | Dongil Steel vs. Samhyun Steel Co | Dongil Steel vs. Gyeongnam Steel Co | Dongil Steel vs. Jeil Steel Mfg |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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