Correlation Between Daewoo SBI and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Stic Investments 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 Daewoo SBI and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Stic Investments, you can compare the effects of market volatilities on Daewoo SBI and Stic Investments 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 Daewoo SBI with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Stic Investments.
Diversification Opportunities for Daewoo SBI and Stic Investments
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daewoo and Stic is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and Daewoo SBI 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 Daewoo SBI SPAC are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Stic Investments go up and down completely randomly.
Pair Corralation between Daewoo SBI and Stic Investments
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 2.26 times more return on investment than Stic Investments. However, Daewoo SBI is 2.26 times more volatile than Stic Investments. It trades about 0.23 of its potential returns per unit of risk. Stic Investments is currently generating about 0.04 per unit of risk. If you would invest 238,500 in Daewoo SBI SPAC on October 5, 2024 and sell it today you would earn a total of 51,000 from holding Daewoo SBI SPAC or generate 21.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Daewoo SBI SPAC vs. Stic Investments
Performance |
Timeline |
Daewoo SBI SPAC |
Stic Investments |
Daewoo SBI and Stic Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daewoo SBI and Stic Investments
The main advantage of trading using opposite Daewoo SBI and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.Daewoo SBI vs. Daou Data Corp | Daewoo SBI vs. Korean Reinsurance Co | Daewoo SBI vs. Hannong Chemicals | Daewoo SBI vs. Ssangyong Information Communication |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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