Correlation Between Vissem Electronics and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both Vissem Electronics 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 Vissem Electronics and Industrial Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vissem Electronics Co and Industrial Bank, you can compare the effects of market volatilities on Vissem Electronics 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 Vissem Electronics with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vissem Electronics and Industrial Bank.
Diversification Opportunities for Vissem Electronics and Industrial Bank
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vissem and Industrial is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vissem Electronics Co and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Vissem Electronics 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 Vissem Electronics Co 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 Vissem Electronics i.e., Vissem Electronics and Industrial Bank go up and down completely randomly.
Pair Corralation between Vissem Electronics and Industrial Bank
Assuming the 90 days trading horizon Vissem Electronics Co is expected to generate 1.3 times more return on investment than Industrial Bank. However, Vissem Electronics is 1.3 times more volatile than Industrial Bank. It trades about 0.08 of its potential returns per unit of risk. Industrial Bank is currently generating about 0.05 per unit of risk. If you would invest 363,000 in Vissem Electronics Co on October 17, 2024 and sell it today you would earn a total of 7,000 from holding Vissem Electronics Co or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vissem Electronics Co vs. Industrial Bank
Performance |
| Timeline |
| Vissem Electronics |
| Industrial Bank |
Vissem Electronics and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vissem Electronics and Industrial Bank
The main advantage of trading using opposite Vissem Electronics and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vissem Electronics 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.| Vissem Electronics vs. Kukdong Oil Chemicals | Vissem Electronics vs. Daishin Information Communications | Vissem Electronics vs. Kisan Telecom Co | Vissem Electronics vs. Lotte Data Communication |
| Industrial Bank vs. KT Submarine Telecom | Industrial Bank vs. SK Telecom Co | Industrial Bank vs. Daishin Information Communications | Industrial Bank vs. Vissem Electronics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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