Correlation Between InfoBank and Hana Materials
Can any of the company-specific risk be diversified away by investing in both InfoBank and Hana Materials 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 Hana Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Hana Materials, you can compare the effects of market volatilities on InfoBank and Hana Materials 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 Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Hana Materials.
Diversification Opportunities for InfoBank and Hana Materials
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfoBank and Hana is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials 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 Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of InfoBank i.e., InfoBank and Hana Materials go up and down completely randomly.
Pair Corralation between InfoBank and Hana Materials
Assuming the 90 days trading horizon InfoBank is expected to generate 1.4 times more return on investment than Hana Materials. However, InfoBank is 1.4 times more volatile than Hana Materials. It trades about 0.08 of its potential returns per unit of risk. Hana Materials is currently generating about -0.13 per unit of risk. If you would invest 560,194 in InfoBank on November 3, 2024 and sell it today you would earn a total of 184,806 from holding InfoBank or generate 32.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Hana Materials
Performance |
| Timeline |
| InfoBank |
| Hana Materials |
InfoBank and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Hana Materials
The main advantage of trading using opposite InfoBank and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.| InfoBank vs. Korea Petro Chemical | InfoBank vs. Tae Kyung Chemical | InfoBank vs. SH Energy Chemical | InfoBank vs. Youngbo Chemical Co |
| Hana Materials vs. ABCO Electronics Co | Hana Materials vs. Air Busan Co | Hana Materials vs. Daeduck Electronics Co | Hana Materials vs. Dongbang Transport Logistics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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