Correlation Between Choil Aluminum and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and Daewoo SBI 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 Choil Aluminum and Daewoo SBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and Daewoo SBI SPAC, you can compare the effects of market volatilities on Choil Aluminum and Daewoo SBI 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 Choil Aluminum with a short position of Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Daewoo SBI.
Diversification Opportunities for Choil Aluminum and Daewoo SBI
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choil and Daewoo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC and Choil Aluminum 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 Choil Aluminum are associated (or correlated) with Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and Daewoo SBI go up and down completely randomly.
Pair Corralation between Choil Aluminum and Daewoo SBI
Assuming the 90 days trading horizon Choil Aluminum is expected to generate 1.36 times more return on investment than Daewoo SBI. However, Choil Aluminum is 1.36 times more volatile than Daewoo SBI SPAC. It trades about -0.18 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.3 per unit of risk. If you would invest 165,300 in Choil Aluminum on September 1, 2024 and sell it today you would lose (16,400) from holding Choil Aluminum or give up 9.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Daewoo SBI SPAC
Performance |
| Timeline |
| Choil Aluminum |
| Daewoo SBI SPAC |
Choil Aluminum and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Daewoo SBI
The main advantage of trading using opposite Choil Aluminum and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI's long position.| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. Busan Ind | Choil Aluminum vs. Mirae Asset Daewoo | Choil Aluminum vs. Finebesteel |
| Daewoo SBI vs. Choil Aluminum | Daewoo SBI vs. Cube Entertainment | Daewoo SBI vs. Kbi Metal Co | Daewoo SBI vs. Asiana Airlines |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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