Correlation Between Daishin Balance and InfoBank
Can any of the company-specific risk be diversified away by investing in both Daishin Balance 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 Daishin Balance and InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance 1 and InfoBank, you can compare the effects of market volatilities on Daishin Balance 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 Daishin Balance with a short position of InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and InfoBank.
Diversification Opportunities for Daishin Balance and InfoBank
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daishin and InfoBank is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance 1 and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Daishin Balance 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 Daishin Balance 1 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 Daishin Balance i.e., Daishin Balance and InfoBank go up and down completely randomly.
Pair Corralation between Daishin Balance and InfoBank
Assuming the 90 days trading horizon Daishin Balance is expected to generate 3.57 times less return on investment than InfoBank. But when comparing it to its historical volatility, Daishin Balance 1 is 1.51 times less risky than InfoBank. It trades about 0.07 of its potential returns per unit of risk. InfoBank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 585,000 in InfoBank on September 2, 2024 and sell it today you would earn a total of 99,000 from holding InfoBank or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance 1 vs. InfoBank
Performance |
| Timeline |
| Daishin Balance 1 |
| InfoBank |
Daishin Balance and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and InfoBank
The main advantage of trading using opposite Daishin Balance and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance 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.| Daishin Balance vs. Pan Entertainment Co | Daishin Balance vs. Korea Air Svc | Daishin Balance vs. Air Busan Co | Daishin Balance vs. Mgame Corp |
| InfoBank vs. Dongsin Engineering Construction | InfoBank vs. Doosan Fuel Cell | InfoBank vs. Daishin Balance 1 | InfoBank vs. Total Soft Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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