Correlation Between Clean Science and InfoBank
Can any of the company-specific risk be diversified away by investing in both Clean Science 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 Clean Science and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Science co and InfoBank, you can compare the effects of market volatilities on Clean Science 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 Clean Science with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and InfoBank.
Diversification Opportunities for Clean Science and InfoBank
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clean and InfoBank is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science co and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Clean Science 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 Clean Science co 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 Clean Science i.e., Clean Science and InfoBank go up and down completely randomly.
Pair Corralation between Clean Science and InfoBank
Assuming the 90 days trading horizon Clean Science co is expected to under-perform the InfoBank. But the stock apears to be less risky and, when comparing its historical volatility, Clean Science co is 4.81 times less risky than InfoBank. The stock trades about -0.47 of its potential returns per unit of risk. The InfoBank is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 594,000 in InfoBank on September 3, 2024 and sell it today you would earn a total of 90,000 from holding InfoBank or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Science co vs. InfoBank
Performance |
| Timeline |
| Clean Science co |
| InfoBank |
Clean Science and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Science and InfoBank
The main advantage of trading using opposite Clean Science and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Science 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.| Clean Science vs. Daol Investment Securities | Clean Science vs. SEOJEON ELECTRIC MACHINERY | Clean Science vs. Hanwha InvestmentSecurities Co | Clean Science vs. SV Investment |
| InfoBank vs. Korea Refract | InfoBank vs. Korea Refractories Co | InfoBank vs. Shinhan Inverse WTI | InfoBank vs. SAMYOUNG M Tek 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 Stocks Directory module to find actively traded stocks across global markets.
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