Correlation Between InfoBank and Daewon Media
Can any of the company-specific risk be diversified away by investing in both InfoBank and Daewon Media 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 Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Daewon Media Co, you can compare the effects of market volatilities on InfoBank and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Daewon Media.
Diversification Opportunities for InfoBank and Daewon Media
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InfoBank and Daewon is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of InfoBank i.e., InfoBank and Daewon Media go up and down completely randomly.
Pair Corralation between InfoBank and Daewon Media
Assuming the 90 days trading horizon InfoBank is expected to generate 2.16 times more return on investment than Daewon Media. However, InfoBank is 2.16 times more volatile than Daewon Media Co. It trades about 0.1 of its potential returns per unit of risk. Daewon Media Co is currently generating about 0.05 per unit of risk. If you would invest 589,992 in InfoBank on November 2, 2024 and sell it today you would earn a total of 142,008 from holding InfoBank or generate 24.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Daewon Media Co
Performance |
| Timeline |
| InfoBank |
| Daewon Media |
InfoBank and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Daewon Media
The main advantage of trading using opposite InfoBank and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| InfoBank vs. Korea Petro Chemical | InfoBank vs. Tae Kyung Chemical | InfoBank vs. SH Energy Chemical | InfoBank vs. Youngbo Chemical Co |
| Daewon Media vs. Korea Computer | Daewon Media vs. Shinil Electronics Co | Daewon Media vs. Daewoo Electronic Components | Daewon Media vs. LG Display Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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