Correlation Between Industrial Bank and Handok Clean
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Handok Clean 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 Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Handok Clean Tech, you can compare the effects of market volatilities on Industrial Bank and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Handok Clean.
Diversification Opportunities for Industrial Bank and Handok Clean
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Handok is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Industrial Bank i.e., Industrial Bank and Handok Clean go up and down completely randomly.
Pair Corralation between Industrial Bank and Handok Clean
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.73 times more return on investment than Handok Clean. However, Industrial Bank is 1.37 times less risky than Handok Clean. It trades about 0.08 of its potential returns per unit of risk. Handok Clean Tech is currently generating about -0.01 per unit of risk. If you would invest 952,138 in Industrial Bank on August 28, 2024 and sell it today you would earn a total of 512,862 from holding Industrial Bank or generate 53.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Industrial Bank vs. Handok Clean Tech
Performance |
| Timeline |
| Industrial Bank |
| Handok Clean Tech |
Industrial Bank and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Handok Clean
The main advantage of trading using opposite Industrial Bank and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean'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 |
| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. UNISEM 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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