Correlation Between InfoBank and LS Materials
Can any of the company-specific risk be diversified away by investing in both InfoBank and LS 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 LS Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and LS Materials, you can compare the effects of market volatilities on InfoBank and LS 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 LS Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and LS Materials.
Diversification Opportunities for InfoBank and LS Materials
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfoBank and 417200 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and LS Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS 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 LS Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS Materials has no effect on the direction of InfoBank i.e., InfoBank and LS Materials go up and down completely randomly.
Pair Corralation between InfoBank and LS Materials
Assuming the 90 days trading horizon InfoBank is expected to under-perform the LS Materials. But the stock apears to be less risky and, when comparing its historical volatility, InfoBank is 5.87 times less risky than LS Materials. The stock trades about -0.04 of its potential returns per unit of risk. The LS Materials is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 599,449 in LS Materials on October 30, 2024 and sell it today you would earn a total of 766,551 from holding LS Materials or generate 127.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.26% |
| Values | Daily Returns |
InfoBank vs. LS Materials
Performance |
| Timeline |
| InfoBank |
| LS Materials |
InfoBank and LS Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and LS Materials
The main advantage of trading using opposite InfoBank and LS Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, LS 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 LS Materials will offset losses from the drop in LS Materials' long position.| InfoBank vs. Choil Aluminum | InfoBank vs. Daiyang Metal Co | InfoBank vs. PJ Metal Co | InfoBank vs. DONGKUK TED METAL |
| LS Materials vs. PlayD Co | LS Materials vs. FOODWELL Co | LS Materials vs. Sempio Foods Co | LS Materials vs. CJ Seafood Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |