Correlation Between Industrial Bank and MEDICOX
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and MEDICOX 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 MEDICOX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and MEDICOX Co, you can compare the effects of market volatilities on Industrial Bank and MEDICOX 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 MEDICOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and MEDICOX.
Diversification Opportunities for Industrial Bank and MEDICOX
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and MEDICOX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and MEDICOX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICOX 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 MEDICOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICOX has no effect on the direction of Industrial Bank i.e., Industrial Bank and MEDICOX go up and down completely randomly.
Pair Corralation between Industrial Bank and MEDICOX
Assuming the 90 days trading horizon Industrial Bank is expected to under-perform the MEDICOX. But the stock apears to be less risky and, when comparing its historical volatility, Industrial Bank is 12.09 times less risky than MEDICOX. The stock trades about 0.0 of its potential returns per unit of risk. The MEDICOX Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 28,500 in MEDICOX Co on November 28, 2024 and sell it today you would earn a total of 2,800 from holding MEDICOX Co or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Industrial Bank vs. MEDICOX Co
Performance |
| Timeline |
| Industrial Bank |
| MEDICOX |
Industrial Bank and MEDICOX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and MEDICOX
The main advantage of trading using opposite Industrial Bank and MEDICOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, MEDICOX 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 MEDICOX will offset losses from the drop in MEDICOX's long position.| Industrial Bank vs. Nable Communications | Industrial Bank vs. Hankukpackage Co | Industrial Bank vs. Lotte Rental Co | Industrial Bank vs. GS Retail Co |
| MEDICOX vs. Sejong Industrial | MEDICOX vs. Industrial Bank | MEDICOX vs. Hyunwoo Industrial Co | MEDICOX vs. Kyeryong Construction Industrial |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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