Correlation Between InfoBank and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both InfoBank and Taegu Broadcasting 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 Taegu Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Taegu Broadcasting, you can compare the effects of market volatilities on InfoBank and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Taegu Broadcasting.
Diversification Opportunities for InfoBank and Taegu Broadcasting
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between InfoBank and Taegu is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of InfoBank i.e., InfoBank and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between InfoBank and Taegu Broadcasting
Assuming the 90 days trading horizon InfoBank is expected to under-perform the Taegu Broadcasting. But the stock apears to be less risky and, when comparing its historical volatility, InfoBank is 1.14 times less risky than Taegu Broadcasting. The stock trades about -0.02 of its potential returns per unit of risk. The Taegu Broadcasting is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 |
InfoBank vs. Taegu Broadcasting
Performance |
| Timeline |
| InfoBank |
| Taegu Broadcasting |
InfoBank and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Taegu Broadcasting
The main advantage of trading using opposite InfoBank and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| InfoBank vs. UJU Electronics Co | InfoBank vs. J Steel Co | InfoBank vs. Insun Environment New | InfoBank vs. Daehan Steel |
| Taegu Broadcasting vs. Hankook Steel Co | Taegu Broadcasting vs. Nature and Environment | Taegu Broadcasting vs. NH Investment Securities | Taegu Broadcasting vs. Hyundai BNG 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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