Correlation Between Total Soft and InfoBank
Can any of the company-specific risk be diversified away by investing in both Total Soft and InfoBank 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 Total Soft and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and InfoBank, you can compare the effects of market volatilities on Total Soft and InfoBank 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 Total Soft with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and InfoBank.
Diversification Opportunities for Total Soft and InfoBank
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Total and InfoBank is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Total Soft 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 Total Soft Bank are associated (or correlated) with InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Total Soft i.e., Total Soft and InfoBank go up and down completely randomly.
Pair Corralation between Total Soft and InfoBank
Assuming the 90 days trading horizon Total Soft Bank is expected to under-perform the InfoBank. But the stock apears to be less risky and, when comparing its historical volatility, Total Soft Bank is 1.07 times less risky than InfoBank. The stock trades about -0.14 of its potential returns per unit of risk. The InfoBank is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 595,000 in InfoBank on August 27, 2024 and sell it today you would earn a total of 132,000 from holding InfoBank or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. InfoBank
Performance |
| Timeline |
| Total Soft Bank |
| InfoBank |
Total Soft and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and InfoBank
The main advantage of trading using opposite Total Soft and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| Total Soft vs. Posco ICT | Total Soft vs. Devsisters corporation | Total Soft vs. Nice Information Telecommunication | Total Soft vs. InfoBank |
| InfoBank vs. Korea Real Estate | InfoBank vs. Korea Ratings Co | InfoBank vs. IQuest Co | InfoBank vs. Wonbang Tech 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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