Correlation Between SBI Investment and Samick Musical
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Samick Musical 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 SBI Investment and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and Samick Musical Instruments, you can compare the effects of market volatilities on SBI Investment and Samick Musical 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 SBI Investment with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Samick Musical.
Diversification Opportunities for SBI Investment and Samick Musical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBI and Samick is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and SBI Investment 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 SBI Investment KOREA are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of SBI Investment i.e., SBI Investment and Samick Musical go up and down completely randomly.
Pair Corralation between SBI Investment and Samick Musical
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the Samick Musical. In addition to that, SBI Investment is 1.35 times more volatile than Samick Musical Instruments. It trades about -0.05 of its total potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.13 per unit of volatility. If you would invest 113,308 in Samick Musical Instruments on October 16, 2024 and sell it today you would earn a total of 4,092 from holding Samick Musical Instruments or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Samick Musical Instruments
Performance |
| Timeline |
| SBI Investment KOREA |
| Samick Musical Instr |
SBI Investment and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Samick Musical
The main advantage of trading using opposite SBI Investment and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| SBI Investment vs. Sungdo Engineering Construction | SBI Investment vs. KTB Investment Securities | SBI Investment vs. Tuksu Engineering ConstructionLtd | SBI Investment vs. KCC Engineering Construction |
| Samick Musical vs. Daejoo Electronic Materials | Samick Musical vs. Hanwha Chemical Corp | Samick Musical vs. Youngchang Chemical Co | Samick Musical vs. Hanil Chemical Ind |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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