Correlation Between INFINITT Healthcare and Osang Healthcare
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare and Osang Healthcare 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 INFINITT Healthcare and Osang Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFINITT Healthcare Co and Osang Healthcare Co,Ltd, you can compare the effects of market volatilities on INFINITT Healthcare and Osang Healthcare 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 INFINITT Healthcare with a short position of Osang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and Osang Healthcare.
Diversification Opportunities for INFINITT Healthcare and Osang Healthcare
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INFINITT and Osang is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and Osang Healthcare Co,Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osang Healthcare Co,Ltd and INFINITT Healthcare 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 INFINITT Healthcare Co are associated (or correlated) with Osang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osang Healthcare Co,Ltd has no effect on the direction of INFINITT Healthcare i.e., INFINITT Healthcare and Osang Healthcare go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and Osang Healthcare
Assuming the 90 days trading horizon INFINITT Healthcare Co is expected to generate 0.8 times more return on investment than Osang Healthcare. However, INFINITT Healthcare Co is 1.25 times less risky than Osang Healthcare. It trades about 0.16 of its potential returns per unit of risk. Osang Healthcare Co,Ltd is currently generating about -0.19 per unit of risk. If you would invest 434,000 in INFINITT Healthcare Co on August 29, 2024 and sell it today you would earn a total of 28,000 from holding INFINITT Healthcare Co or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFINITT Healthcare Co vs. Osang Healthcare Co,Ltd
Performance |
| Timeline |
| INFINITT Healthcare |
| Osang Healthcare Co,Ltd |
INFINITT Healthcare and Osang Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFINITT Healthcare and Osang Healthcare
The main advantage of trading using opposite INFINITT Healthcare and Osang Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare position performs unexpectedly, Osang Healthcare 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 Osang Healthcare will offset losses from the drop in Osang Healthcare's long position.| INFINITT Healthcare vs. Samsung Electronics Co | INFINITT Healthcare vs. Samsung Electronics Co | INFINITT Healthcare vs. LG Energy Solution | INFINITT Healthcare vs. SK Hynix |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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