Correlation Between Handok Clean and Industrial Bank

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

By analyzing existing cross correlation between Handok Clean Tech and Industrial Bank, you can compare the effects of market volatilities on Handok Clean 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 Handok Clean with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Industrial Bank.

Diversification Opportunities for Handok Clean and Industrial Bank

-0.35

Correlation Coefficient

Handok Clean  Industrial Bank

Very good diversification

The 3 months correlation between Handok and Industrial is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Handok Clean 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 Handok Clean Tech 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 Handok Clean i.e., Handok Clean and Industrial Bank go up and down completely randomly.

Pair Corralation between Handok Clean and Industrial Bank

Assuming the 90 days trading horizon Handok Clean Tech is expected to under-perform the Industrial Bank. In addition to that, Handok Clean is 1.35 times more volatile than Industrial Bank. It trades about -0.01 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  980,142  in Industrial Bank on October 3, 2024 and sell it today you would earn a total of  452,858  from holding Industrial Bank or generate 46.2% return on investment over 90 days.

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

Handok Clean Tech  vs.  Industrial Bank

Handok Clean Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Handok Clean Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Industrial Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Industrial Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Handok Clean and Industrial Bank

The main advantage of trading using opposite Handok Clean and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean 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.

The idea behind Handok Clean Tech and Industrial Bank 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.