Correlation Between Seojin Automotive and InfoBank
Can any of the company-specific risk be diversified away by investing in both Seojin Automotive 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 Seojin Automotive and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seojin Automotive CoLtd and InfoBank, you can compare the effects of market volatilities on Seojin Automotive 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 Seojin Automotive with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seojin Automotive and InfoBank.
Diversification Opportunities for Seojin Automotive and InfoBank
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seojin and InfoBank is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Seojin Automotive CoLtd and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Seojin Automotive 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 Seojin Automotive CoLtd 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 Seojin Automotive i.e., Seojin Automotive and InfoBank go up and down completely randomly.
Pair Corralation between Seojin Automotive and InfoBank
Assuming the 90 days trading horizon Seojin Automotive CoLtd is expected to under-perform the InfoBank. But the stock apears to be less risky and, when comparing its historical volatility, Seojin Automotive CoLtd is 2.23 times less risky than InfoBank. The stock trades about -0.2 of its potential returns per unit of risk. The InfoBank is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 559,000 in InfoBank on September 14, 2024 and sell it today you would earn a total of 104,000 from holding InfoBank or generate 18.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seojin Automotive CoLtd vs. InfoBank
Performance |
| Timeline |
| Seojin Automotive CoLtd |
| InfoBank |
Seojin Automotive and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seojin Automotive and InfoBank
The main advantage of trading using opposite Seojin Automotive and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seojin Automotive 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.| Seojin Automotive vs. Lion Chemtech Co | Seojin Automotive vs. PH Tech Co | Seojin Automotive vs. Jeju Air Co | Seojin Automotive vs. Korea Investment Holdings |
| InfoBank vs. Cube Entertainment | InfoBank vs. Dreamus Company | InfoBank vs. LG Energy Solution | InfoBank vs. Dongwon System |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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