Correlation Between SBI Investment and IQuest
Can any of the company-specific risk be diversified away by investing in both SBI Investment and IQuest 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 IQuest 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 IQuest Co, you can compare the effects of market volatilities on SBI Investment and IQuest 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 IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and IQuest.
Diversification Opportunities for SBI Investment and IQuest
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and IQuest is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest 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 IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of SBI Investment i.e., SBI Investment and IQuest go up and down completely randomly.
Pair Corralation between SBI Investment and IQuest
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 0.97 times more return on investment than IQuest. However, SBI Investment KOREA is 1.04 times less risky than IQuest. It trades about -0.01 of its potential returns per unit of risk. IQuest Co is currently generating about -0.02 per unit of risk. If you would invest 99,700 in SBI Investment KOREA on October 4, 2024 and sell it today you would lose (23,600) from holding SBI Investment KOREA or give up 23.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SBI Investment KOREA vs. IQuest Co
Performance |
Timeline |
SBI Investment KOREA |
IQuest |
SBI Investment and IQuest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SBI Investment and IQuest
The main advantage of trading using opposite SBI Investment and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, IQuest 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 IQuest will offset losses from the drop in IQuest's long position.SBI Investment vs. Daou Data Corp | SBI Investment vs. Solution Advanced Technology | SBI Investment vs. Busan Industrial Co | SBI Investment vs. Busan Ind |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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