Correlation Between Formetal and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both Formetal 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 Formetal and Industrial Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and Industrial Bank, you can compare the effects of market volatilities on Formetal 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 Formetal with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and Industrial Bank.
Diversification Opportunities for Formetal and Industrial Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Formetal and Industrial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Formetal 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 Formetal 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 Formetal i.e., Formetal and Industrial Bank go up and down completely randomly.
Pair Corralation between Formetal and Industrial Bank
If you would invest 272,500 in Formetal Co on September 13, 2024 and sell it today you would earn a total of 80,000 from holding Formetal Co or generate 29.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Formetal Co vs. Industrial Bank
Performance |
| Timeline |
| Formetal |
| Industrial Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Formetal and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and Industrial Bank
The main advantage of trading using opposite Formetal and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal 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.| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
| Industrial Bank vs. Ssangyong Materials Corp | Industrial Bank vs. Home Center Holdings | Industrial Bank vs. Hyosung Advanced Materials | Industrial Bank vs. INNOX Advanced Materials |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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