Correlation Between Industrial Bank and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Dongkuk Structures 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 Dongkuk Structures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Dongkuk Structures Construction, you can compare the effects of market volatilities on Industrial Bank and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Dongkuk Structures.
Diversification Opportunities for Industrial Bank and Dongkuk Structures
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrial and Dongkuk is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Industrial Bank i.e., Industrial Bank and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Industrial Bank and Dongkuk Structures
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.39 times more return on investment than Dongkuk Structures. However, Industrial Bank is 2.56 times less risky than Dongkuk Structures. It trades about 0.19 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.03 per unit of risk. If you would invest 1,473,000 in Industrial Bank on October 25, 2024 and sell it today you would earn a total of 35,000 from holding Industrial Bank or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Industrial Bank vs. Dongkuk Structures Constructio
Performance |
| Timeline |
| Industrial Bank |
| Dongkuk Structures |
Industrial Bank and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Dongkuk Structures
The main advantage of trading using opposite Industrial Bank and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Industrial Bank vs. Samsung Electronics Co | Industrial Bank vs. Samsung Electronics Co | Industrial Bank vs. SK Hynix | Industrial Bank vs. HMM Co |
| Dongkuk Structures vs. Korea Information Communications | Dongkuk Structures vs. Mobileleader CoLtd | Dongkuk Structures vs. Kbi Metal Co | Dongkuk Structures vs. GS Retail 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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