Correlation Between InfoBank and Daewon Media

Can any of the company-specific risk be diversified away by investing in both InfoBank and Daewon Media 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 InfoBank and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InfoBank and Daewon Media Co, you can compare the effects of market volatilities on InfoBank and Daewon Media 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 InfoBank with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Daewon Media.

Diversification Opportunities for InfoBank and Daewon Media

-0.78

Correlation Coefficient

InfoBank  Daewon Media

Pay attention - limited upside

The 3 months correlation between InfoBank and Daewon is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and InfoBank 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 InfoBank are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of InfoBank i.e., InfoBank and Daewon Media go up and down completely randomly.

Pair Corralation between InfoBank and Daewon Media

Assuming the 90 days trading horizon InfoBank is expected to under-perform the Daewon Media. But the stock apears to be less risky and, when comparing its historical volatility, InfoBank is 1.08 times less risky than Daewon Media. The stock trades about -0.21 of its potential returns per unit of risk. The Daewon Media Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  764,000  in Daewon Media Co on December 30, 2024 and sell it today you would earn a total of  265,000  from holding Daewon Media Co or generate 34.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

InfoBank  vs.  Daewon Media Co

InfoBank

Risk-Adjusted Performance

Very Weak

Over the last 90 days InfoBank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Daewon Media

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Daewon Media Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daewon Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InfoBank and Daewon Media

The main advantage of trading using opposite InfoBank and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.

The idea behind InfoBank and Daewon Media Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.