Correlation Between Industrial Bank and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and EBEST Investment 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 EBEST Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and EBEST Investment Securities, you can compare the effects of market volatilities on Industrial Bank and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and EBEST Investment.
Diversification Opportunities for Industrial Bank and EBEST Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and EBEST is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Industrial Bank i.e., Industrial Bank and EBEST Investment go up and down completely randomly.
Pair Corralation between Industrial Bank and EBEST Investment
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.81 times more return on investment than EBEST Investment. However, Industrial Bank is 1.24 times less risky than EBEST Investment. It trades about 0.06 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.23 per unit of risk. If you would invest 1,450,000 in Industrial Bank on August 29, 2024 and sell it today you would earn a total of 19,000 from holding Industrial Bank or generate 1.31% 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. EBEST Investment Securities
Performance |
| Timeline |
| Industrial Bank |
| EBEST Investment Sec |
Industrial Bank and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and EBEST Investment
The main advantage of trading using opposite Industrial Bank and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Industrial Bank vs. Shinhan Inverse Copper | Industrial Bank vs. Insung Information Co | Industrial Bank vs. Bohae Brewery | Industrial Bank vs. Shinsegae Information Communication |
| EBEST Investment vs. DB Insurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Pyung Hwa Industrial | EBEST Investment vs. Daiyang Metal Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |