Correlation Between Industrial Bank and SPG
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and SPG 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 SPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and SPG Co, you can compare the effects of market volatilities on Industrial Bank and SPG 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 SPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and SPG.
Diversification Opportunities for Industrial Bank and SPG
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and SPG is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and SPG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPG Co 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 SPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPG Co has no effect on the direction of Industrial Bank i.e., Industrial Bank and SPG go up and down completely randomly.
Pair Corralation between Industrial Bank and SPG
Assuming the 90 days trading horizon Industrial Bank is expected to generate 2.52 times less return on investment than SPG. But when comparing it to its historical volatility, Industrial Bank is 2.83 times less risky than SPG. It trades about 0.1 of its potential returns per unit of risk. SPG Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,115,000 in SPG Co on August 27, 2024 and sell it today you would earn a total of 100,000 from holding SPG Co or generate 4.73% 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. SPG Co
Performance |
| Timeline |
| Industrial Bank |
| SPG Co |
Industrial Bank and SPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and SPG
The main advantage of trading using opposite Industrial Bank and SPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, SPG 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 SPG will offset losses from the drop in SPG's long position.| Industrial Bank vs. DB Insurance Co | Industrial Bank vs. Settlebank | Industrial Bank vs. Lotte Data Communication | Industrial Bank vs. Jeju Bank |
| SPG vs. Jinro Distillers Co | SPG vs. Shinhan Inverse Copper | SPG vs. Daejung Chemicals Metals | SPG vs. Korea Shipbuilding Offshore |
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 Directory module to find actively traded commodities issued by global exchanges.
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