Correlation Between Hanwha InvestmentSecuri and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha InvestmentSecurities Co and SBI Investment KOREA, you can compare the effects of market volatilities on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and SBI Investment.
Diversification Opportunities for Hanwha InvestmentSecuri and SBI Investment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanwha and SBI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co 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 Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co 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 Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and SBI Investment go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and SBI Investment
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 2.53 times more return on investment than SBI Investment. However, Hanwha InvestmentSecuri is 2.53 times more volatile than SBI Investment KOREA. It trades about 0.09 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.12 per unit of risk. If you would invest 688,000 in Hanwha InvestmentSecurities Co on August 28, 2024 and sell it today you would earn a total of 67,000 from holding Hanwha InvestmentSecurities Co or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. SBI Investment KOREA
Performance |
| Timeline |
| Hanwha InvestmentSecuri |
| SBI Investment KOREA |
Hanwha InvestmentSecuri and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha InvestmentSecuri and SBI Investment
The main advantage of trading using opposite Hanwha InvestmentSecuri and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co 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.| SBI Investment vs. Daekyung Machinery Engineering | SBI Investment vs. PlayD Co | SBI Investment vs. Playgram Co | SBI Investment vs. Camus Engineering Construction |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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