Correlation Between Industrial Bank and Cytogen
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Cytogen 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 Cytogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Cytogen, you can compare the effects of market volatilities on Industrial Bank and Cytogen 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 Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Cytogen.
Diversification Opportunities for Industrial Bank and Cytogen
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrial and Cytogen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen 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 Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of Industrial Bank i.e., Industrial Bank and Cytogen go up and down completely randomly.
Pair Corralation between Industrial Bank and Cytogen
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.27 times more return on investment than Cytogen. However, Industrial Bank is 3.72 times less risky than Cytogen. It trades about 0.06 of its potential returns per unit of risk. Cytogen is currently generating about -0.09 per unit of risk. If you would invest 1,280,000 in Industrial Bank on October 14, 2024 and sell it today you would earn a total of 185,000 from holding Industrial Bank or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Cytogen
Performance |
| Timeline |
| Industrial Bank |
| Cytogen |
Industrial Bank and Cytogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Cytogen
The main advantage of trading using opposite Industrial Bank and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.| Industrial Bank vs. Namhwa Industrial Co | Industrial Bank vs. Hyundai Industrial Co | Industrial Bank vs. Lotte Non Life Insurance | Industrial Bank vs. Daesung Industrial Co |
| Cytogen vs. Pyung Hwa Industrial | Cytogen vs. Drb Industrial | Cytogen vs. Hwasung Industrial Co | Cytogen vs. Industrial Bank |
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 CEOs Directory module to screen CEOs from public companies around the world.
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