Correlation Between Home Center and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both Home Center and Industrial Bank 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 Home Center and Industrial Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Center Holdings and Industrial Bank, you can compare the effects of market volatilities on Home Center and Industrial Bank 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 Home Center with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Center and Industrial Bank.
Diversification Opportunities for Home Center and Industrial Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Industrial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Center Holdings and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Home Center 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 Home Center Holdings are associated (or correlated) with Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Home Center i.e., Home Center and Industrial Bank go up and down completely randomly.
Pair Corralation between Home Center and Industrial Bank
If you would invest 76,800 in Home Center Holdings on September 13, 2024 and sell it today you would earn a total of 1,700 from holding Home Center Holdings or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Home Center Holdings vs. Industrial Bank
Performance |
| Timeline |
| Home Center Holdings |
| Industrial Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Center and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Center and Industrial Bank
The main advantage of trading using opposite Home Center and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Center position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.| Home Center vs. LG Chemicals | Home Center vs. POSCO Holdings | Home Center vs. Hanwha Solutions | Home Center vs. Lotte Chemical Corp |
| Industrial Bank vs. Ssangyong Materials Corp | Industrial Bank vs. Home Center Holdings | Industrial Bank vs. Hyosung Advanced Materials | Industrial Bank vs. INNOX Advanced Materials |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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