Correlation Between EBEST Investment and Insung Information
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Insung Information 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 EBEST Investment and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Insung Information Co, you can compare the effects of market volatilities on EBEST Investment and Insung Information 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 EBEST Investment with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Insung Information.
Diversification Opportunities for EBEST Investment and Insung Information
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EBEST and Insung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of EBEST Investment i.e., EBEST Investment and Insung Information go up and down completely randomly.
Pair Corralation between EBEST Investment and Insung Information
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Insung Information. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 2.15 times less risky than Insung Information. The stock trades about -0.21 of its potential returns per unit of risk. The Insung Information Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 196,700 in Insung Information Co on August 25, 2024 and sell it today you would lose (8,900) from holding Insung Information Co or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Insung Information Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Insung Information |
EBEST Investment and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Insung Information
The main advantage of trading using opposite EBEST Investment and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| EBEST Investment vs. SKONEC Entertainment Co | EBEST Investment vs. Pan Entertainment Co | EBEST Investment vs. SS TECH | EBEST Investment vs. Konan Technology |
| Insung Information vs. Korea Real Estate | Insung Information vs. Korea Ratings Co | Insung Information vs. IQuest Co | Insung Information 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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