Correlation Between Taegu Broadcasting and InfoBank
Can any of the company-specific risk be diversified away by investing in both Taegu Broadcasting and InfoBank 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 Taegu Broadcasting and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taegu Broadcasting and InfoBank, you can compare the effects of market volatilities on Taegu Broadcasting and InfoBank 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 Taegu Broadcasting with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taegu Broadcasting and InfoBank.
Diversification Opportunities for Taegu Broadcasting and InfoBank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taegu and InfoBank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Taegu Broadcasting and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Taegu Broadcasting 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 Taegu Broadcasting are associated (or correlated) with InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Taegu Broadcasting i.e., Taegu Broadcasting and InfoBank go up and down completely randomly.
Pair Corralation between Taegu Broadcasting and InfoBank
Assuming the 90 days trading horizon Taegu Broadcasting is expected to generate 1.14 times more return on investment than InfoBank. However, Taegu Broadcasting is 1.14 times more volatile than InfoBank. It trades about 0.12 of its potential returns per unit of risk. InfoBank is currently generating about -0.02 per unit of risk. If you would invest 84,315 in Taegu Broadcasting on October 24, 2024 and sell it today you would earn a total of 4,385 from holding Taegu Broadcasting or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taegu Broadcasting vs. InfoBank
Performance |
| Timeline |
| Taegu Broadcasting |
| InfoBank |
Taegu Broadcasting and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taegu Broadcasting and InfoBank
The main advantage of trading using opposite Taegu Broadcasting and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taegu Broadcasting position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| Taegu Broadcasting vs. Hankook Steel Co | Taegu Broadcasting vs. Nature and Environment | Taegu Broadcasting vs. NH Investment Securities | Taegu Broadcasting vs. Hyundai BNG Steel |
| InfoBank vs. UJU Electronics Co | InfoBank vs. J Steel Co | InfoBank vs. Insun Environment New | InfoBank vs. Daehan Steel |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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