Correlation Between SBI Investment and Korea Information
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Korea Information 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 SBI Investment and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and Korea Information Communications, you can compare the effects of market volatilities on SBI Investment and Korea Information 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 SBI Investment with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Korea Information.
Diversification Opportunities for SBI Investment and Korea Information
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and Korea is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and SBI 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 SBI Investment KOREA are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of SBI Investment i.e., SBI Investment and Korea Information go up and down completely randomly.
Pair Corralation between SBI Investment and Korea Information
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 3.35 times more return on investment than Korea Information. However, SBI Investment is 3.35 times more volatile than Korea Information Communications. It trades about 0.12 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.06 per unit of risk. If you would invest 64,700 in SBI Investment KOREA on September 25, 2024 and sell it today you would earn a total of 13,100 from holding SBI Investment KOREA or generate 20.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SBI Investment KOREA vs. Korea Information Communicatio
Performance |
Timeline |
SBI Investment KOREA |
Korea Information |
SBI Investment and Korea Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SBI Investment and Korea Information
The main advantage of trading using opposite SBI Investment and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.SBI Investment vs. YG Entertainment | SBI Investment vs. SK Telecom Co | SBI Investment vs. Next Entertainment World | SBI Investment vs. Lotte Data Communication |
Korea Information vs. Woori Technology Investment | Korea Information vs. FoodNamoo | Korea Information vs. Daelim Trading Co | Korea Information vs. SBI Investment KOREA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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