Correlation Between TS Investment and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both TS Investment 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 TS Investment and Industrial Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TS Investment Corp and Industrial Bank, you can compare the effects of market volatilities on TS Investment 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 TS Investment with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TS Investment and Industrial Bank.
Diversification Opportunities for TS Investment and Industrial Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 246690 and Industrial is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and TS Investment 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 TS Investment Corp 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 TS Investment i.e., TS Investment and Industrial Bank go up and down completely randomly.
Pair Corralation between TS Investment and Industrial Bank
Assuming the 90 days trading horizon TS Investment Corp is expected to under-perform the Industrial Bank. In addition to that, TS Investment is 4.74 times more volatile than Industrial Bank. It trades about -0.22 of its total potential returns per unit of risk. Industrial Bank is currently generating about 0.07 per unit of volatility. If you would invest 1,441,706 in Industrial Bank on December 31, 2024 and sell it today you would earn a total of 12,294 from holding Industrial Bank or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TS Investment Corp vs. Industrial Bank
Performance |
| Timeline |
| TS Investment Corp |
| Industrial Bank |
TS Investment and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TS Investment and Industrial Bank
The main advantage of trading using opposite TS Investment and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TS Investment 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.| TS Investment vs. Samsung Electronics Co | TS Investment vs. Samsung Electronics Co | TS Investment vs. LG Energy Solution | TS Investment vs. SK Hynix |
| Industrial Bank vs. HB Technology TD | Industrial Bank vs. Hyundai Green Food | Industrial Bank vs. ENF Technology Co | Industrial Bank vs. Sam Yang Foods |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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