Correlation Between InfoBank and MEDIANA CoLtd
Can any of the company-specific risk be diversified away by investing in both InfoBank and MEDIANA CoLtd 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 MEDIANA CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and MEDIANA CoLtd, you can compare the effects of market volatilities on InfoBank and MEDIANA CoLtd 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 MEDIANA CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and MEDIANA CoLtd.
Diversification Opportunities for InfoBank and MEDIANA CoLtd
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InfoBank and MEDIANA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and MEDIANA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIANA CoLtd 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 MEDIANA CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIANA CoLtd has no effect on the direction of InfoBank i.e., InfoBank and MEDIANA CoLtd go up and down completely randomly.
Pair Corralation between InfoBank and MEDIANA CoLtd
Assuming the 90 days trading horizon InfoBank is expected to under-perform the MEDIANA CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, InfoBank is 1.0 times less risky than MEDIANA CoLtd. The stock trades about -0.24 of its potential returns per unit of risk. The MEDIANA CoLtd is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 483,000 in MEDIANA CoLtd on November 3, 2024 and sell it today you would lose (17,000) from holding MEDIANA CoLtd or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. MEDIANA CoLtd
Performance |
| Timeline |
| InfoBank |
| MEDIANA CoLtd |
InfoBank and MEDIANA CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and MEDIANA CoLtd
The main advantage of trading using opposite InfoBank and MEDIANA CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, MEDIANA CoLtd 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 MEDIANA CoLtd will offset losses from the drop in MEDIANA CoLtd's long position.| InfoBank vs. Samhyun Steel Co | InfoBank vs. Dong A Steel Technology | InfoBank vs. NH Investment Securities | InfoBank vs. Seah Steel Corp |
| MEDIANA CoLtd vs. KPX Green Chemical | MEDIANA CoLtd vs. Tway Air Co | MEDIANA CoLtd vs. Air Busan Co | MEDIANA CoLtd vs. Kg Chemical |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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