Correlation Between Hanshin Construction and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction 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 Hanshin Construction and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and SBI Investment KOREA, you can compare the effects of market volatilities on Hanshin Construction 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 Hanshin Construction with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and SBI Investment.
Diversification Opportunities for Hanshin Construction and SBI Investment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanshin and SBI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction 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 Hanshin Construction 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 Hanshin Construction 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 Hanshin Construction i.e., Hanshin Construction and SBI Investment go up and down completely randomly.
Pair Corralation between Hanshin Construction and SBI Investment
Assuming the 90 days trading horizon Hanshin Construction is expected to generate 1.43 times less return on investment than SBI Investment. But when comparing it to its historical volatility, Hanshin Construction Co is 1.11 times less risky than SBI Investment. It trades about 0.23 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 72,400 in SBI Investment KOREA on October 9, 2024 and sell it today you would earn a total of 9,700 from holding SBI Investment KOREA or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanshin Construction Co vs. SBI Investment KOREA
Performance |
| Timeline |
| Hanshin Construction |
| SBI Investment KOREA |
Hanshin Construction and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and SBI Investment
The main advantage of trading using opposite Hanshin Construction and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction 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.| Hanshin Construction vs. FOODWELL Co | Hanshin Construction vs. CJ Seafood Corp | Hanshin Construction vs. Haitai Confectionery Foods | Hanshin Construction vs. Hyosung Advanced Materials |
| SBI Investment vs. Asiana Airlines | SBI Investment vs. Shinhan Inverse Silver | SBI Investment vs. Alton Sports CoLtd | SBI Investment vs. Korea Air Svc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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