Correlation Between Tuksu Engineering and SBI Investment

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

By analyzing existing cross correlation between Tuksu Engineering ConstructionLtd and SBI Investment KOREA, you can compare the effects of market volatilities on Tuksu Engineering and SBI Investment 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 Tuksu Engineering with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuksu Engineering and SBI Investment.

Diversification Opportunities for Tuksu Engineering and SBI Investment

0.14

Correlation Coefficient

Tuksu Engineering  SBI Investment

Average diversification

The 3 months correlation between Tuksu and SBI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tuksu Engineering Construction and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA and Tuksu Engineering 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 Tuksu Engineering ConstructionLtd are associated (or correlated) with SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Tuksu Engineering i.e., Tuksu Engineering and SBI Investment go up and down completely randomly.

Pair Corralation between Tuksu Engineering and SBI Investment

Assuming the 90 days trading horizon Tuksu Engineering ConstructionLtd is expected to generate 1.02 times more return on investment than SBI Investment. However, Tuksu Engineering is 1.02 times more volatile than SBI Investment KOREA. It trades about 0.01 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.11 per unit of risk. If you would invest  637,000  in Tuksu Engineering ConstructionLtd on December 23, 2024 and sell it today you would lose (2,000) from holding Tuksu Engineering ConstructionLtd or give up 0.31% of portfolio value over 90 days.

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

Tuksu Engineering Construction  vs.  SBI Investment KOREA

Tuksu Engineering

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tuksu Engineering ConstructionLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tuksu Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SBI Investment KOREA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SBI Investment KOREA 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.

Pair Trading with Tuksu Engineering and SBI Investment

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

The idea behind Tuksu Engineering ConstructionLtd and SBI Investment KOREA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.