Correlation Between Showbox Corp and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Showbox Corp and Incar Financial 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 Showbox Corp and Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Showbox Corp and Incar Financial Service, you can compare the effects of market volatilities on Showbox Corp and Incar Financial 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 Showbox Corp with a short position of Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Showbox Corp and Incar Financial.
Diversification Opportunities for Showbox Corp and Incar Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Showbox and Incar is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Showbox Corp and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service and Showbox Corp 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 Showbox Corp are associated (or correlated) with Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Showbox Corp i.e., Showbox Corp and Incar Financial go up and down completely randomly.
Pair Corralation between Showbox Corp and Incar Financial
Assuming the 90 days trading horizon Showbox Corp is expected to under-perform the Incar Financial. But the stock apears to be less risky and, when comparing its historical volatility, Showbox Corp is 1.29 times less risky than Incar Financial. The stock trades about -0.09 of its potential returns per unit of risk. The Incar Financial Service is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 513,000 in Incar Financial Service on September 13, 2024 and sell it today you would earn a total of 97,000 from holding Incar Financial Service or generate 18.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Showbox Corp vs. Incar Financial Service
Performance |
| Timeline |
| Showbox Corp |
| Incar Financial Service |
Showbox Corp and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Showbox Corp and Incar Financial
The main advantage of trading using opposite Showbox Corp and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Showbox Corp position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Showbox Corp vs. Wireless Power Amplifier | Showbox Corp vs. Organic Special Pet | Showbox Corp vs. Shinsegae Food | Showbox Corp vs. Seoul Electronics Telecom |
| Incar Financial vs. Solution Advanced Technology | Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Sam Chun Dang |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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