Correlation Between InfoBank and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both InfoBank and Daiyang Metal 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 InfoBank and Daiyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Daiyang Metal Co, you can compare the effects of market volatilities on InfoBank and Daiyang Metal 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 InfoBank with a short position of Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Daiyang Metal.
Diversification Opportunities for InfoBank and Daiyang Metal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between InfoBank and Daiyang is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal and InfoBank 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 InfoBank are associated (or correlated) with Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of InfoBank i.e., InfoBank and Daiyang Metal go up and down completely randomly.
Pair Corralation between InfoBank and Daiyang Metal
Assuming the 90 days trading horizon InfoBank is expected to generate 0.79 times more return on investment than Daiyang Metal. However, InfoBank is 1.27 times less risky than Daiyang Metal. It trades about -0.08 of its potential returns per unit of risk. Daiyang Metal Co is currently generating about -0.16 per unit of risk. If you would invest 759,000 in InfoBank on October 28, 2024 and sell it today you would lose (27,000) from holding InfoBank or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Daiyang Metal Co
Performance |
| Timeline |
| InfoBank |
| Daiyang Metal |
InfoBank and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Daiyang Metal
The main advantage of trading using opposite InfoBank and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| InfoBank vs. Samsung Electronics Co | InfoBank vs. Samsung Electronics Co | InfoBank vs. SK Hynix | InfoBank vs. HMM Co |
| Daiyang Metal vs. KB Financial Group | Daiyang Metal vs. Shinhan Financial Group | Daiyang Metal vs. Hana Financial | Daiyang Metal vs. Woori Financial Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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