Correlation Between InfoBank and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both InfoBank and Vissem Electronics 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 Vissem Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Vissem Electronics Co, you can compare the effects of market volatilities on InfoBank and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Vissem Electronics.
Diversification Opportunities for InfoBank and Vissem Electronics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfoBank and Vissem is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of InfoBank i.e., InfoBank and Vissem Electronics go up and down completely randomly.
Pair Corralation between InfoBank and Vissem Electronics
Assuming the 90 days trading horizon InfoBank is expected to under-perform the Vissem Electronics. In addition to that, InfoBank is 1.15 times more volatile than Vissem Electronics Co. It trades about -0.03 of its total potential returns per unit of risk. Vissem Electronics Co is currently generating about -0.01 per unit of volatility. If you would invest 476,219 in Vissem Electronics Co on November 7, 2024 and sell it today you would lose (119,219) from holding Vissem Electronics Co or give up 25.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Vissem Electronics Co
Performance |
| Timeline |
| InfoBank |
| Vissem Electronics |
InfoBank and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Vissem Electronics
The main advantage of trading using opposite InfoBank and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| InfoBank vs. Samsung Electronics Co | InfoBank vs. Samsung Electronics Co | InfoBank vs. Hyundai Motor Co | InfoBank vs. Hyundai Motor |
| Vissem Electronics vs. GS Engineering Construction | Vissem Electronics vs. Hanshin Construction Co | Vissem Electronics vs. Hanjoo Light Metal | Vissem Electronics vs. Daewoo Engineering Construction |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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