Correlation Between InfoBank and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both InfoBank and Dongil Technology 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 Dongil Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Dongil Technology, you can compare the effects of market volatilities on InfoBank and Dongil Technology 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Dongil Technology.
Diversification Opportunities for InfoBank and Dongil Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfoBank and Dongil is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of InfoBank i.e., InfoBank and Dongil Technology go up and down completely randomly.
Pair Corralation between InfoBank and Dongil Technology
Assuming the 90 days trading horizon InfoBank is expected to under-perform the Dongil Technology. In addition to that, InfoBank is 2.02 times more volatile than Dongil Technology. It trades about -0.23 of its total potential returns per unit of risk. Dongil Technology is currently generating about -0.39 per unit of volatility. If you would invest 1,048,000 in Dongil Technology on November 7, 2024 and sell it today you would lose (61,000) from holding Dongil Technology or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
InfoBank vs. Dongil Technology
Performance |
| Timeline |
| InfoBank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Dongil Technology |
InfoBank and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Dongil Technology
The main advantage of trading using opposite InfoBank and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.The idea behind InfoBank and Dongil Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dongil Technology vs. Samsung Electronics Co | Dongil Technology vs. Hyundai Motor Co | Dongil Technology vs. LG Electronics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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