Correlation Between Okins Electronics and InfoBank
Can any of the company-specific risk be diversified away by investing in both Okins Electronics 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 Okins Electronics and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okins Electronics Co and InfoBank, you can compare the effects of market volatilities on Okins Electronics 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 Okins Electronics with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okins Electronics and InfoBank.
Diversification Opportunities for Okins Electronics and InfoBank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okins and InfoBank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Okins Electronics Co and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Okins 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 Okins Electronics 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 Okins Electronics i.e., Okins Electronics and InfoBank go up and down completely randomly.
Pair Corralation between Okins Electronics and InfoBank
Assuming the 90 days trading horizon Okins Electronics Co is expected to generate 1.89 times more return on investment than InfoBank. However, Okins Electronics is 1.89 times more volatile than InfoBank. It trades about 0.03 of its potential returns per unit of risk. InfoBank is currently generating about -0.05 per unit of risk. If you would invest 397,000 in Okins Electronics Co on September 4, 2024 and sell it today you would earn a total of 46,000 from holding Okins Electronics Co or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okins Electronics Co vs. InfoBank
Performance |
| Timeline |
| Okins Electronics |
| InfoBank |
Okins Electronics and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okins Electronics and InfoBank
The main advantage of trading using opposite Okins Electronics and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okins Electronics 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.| Okins Electronics vs. Dongsin Engineering Construction | Okins Electronics vs. Doosan Fuel Cell | Okins Electronics vs. Daishin Balance 1 | Okins Electronics vs. Total Soft Bank |
| InfoBank vs. Daeduck Electronics Co | InfoBank vs. Shinil Electronics Co | InfoBank vs. Okins Electronics Co | InfoBank vs. DSC Investment |
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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