Correlation Between InfoBank and Daesung Industrial
Can any of the company-specific risk be diversified away by investing in both InfoBank and Daesung Industrial 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 Daesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Daesung Industrial Co, you can compare the effects of market volatilities on InfoBank and Daesung Industrial 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 Daesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Daesung Industrial.
Diversification Opportunities for InfoBank and Daesung Industrial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between InfoBank and Daesung is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Daesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Industrial 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 Daesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Industrial has no effect on the direction of InfoBank i.e., InfoBank and Daesung Industrial go up and down completely randomly.
Pair Corralation between InfoBank and Daesung Industrial
Assuming the 90 days trading horizon InfoBank is expected to generate 3.75 times more return on investment than Daesung Industrial. However, InfoBank is 3.75 times more volatile than Daesung Industrial Co. It trades about 0.19 of its potential returns per unit of risk. Daesung Industrial Co is currently generating about -0.26 per unit of risk. If you would invest 658,526 in InfoBank on October 13, 2024 and sell it today you would earn a total of 120,474 from holding InfoBank or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
InfoBank vs. Daesung Industrial Co
Performance |
| Timeline |
| InfoBank |
| Daesung Industrial |
InfoBank and Daesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Daesung Industrial
The main advantage of trading using opposite InfoBank and Daesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Daesung Industrial 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 Daesung Industrial will offset losses from the drop in Daesung Industrial's long position.| InfoBank vs. Lotte Rental Co | InfoBank vs. Wave Electronics Co | InfoBank vs. KyungIn Electronics Co | InfoBank vs. Seoul Semiconductor Co |
| Daesung Industrial vs. InfoBank | Daesung Industrial vs. Jeju Semiconductor Corp | Daesung Industrial vs. DB Insurance Co | Daesung Industrial vs. BNK Financial Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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