Correlation Between SBI Investment and Daekyung Machinery
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Daekyung Machinery 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 Daekyung Machinery 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 Daekyung Machinery Engineering, you can compare the effects of market volatilities on SBI Investment and Daekyung Machinery 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 Daekyung Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Daekyung Machinery.
Diversification Opportunities for SBI Investment and Daekyung Machinery
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SBI and Daekyung is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Daekyung Machinery Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daekyung Machinery 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 Daekyung Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daekyung Machinery has no effect on the direction of SBI Investment i.e., SBI Investment and Daekyung Machinery go up and down completely randomly.
Pair Corralation between SBI Investment and Daekyung Machinery
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the Daekyung Machinery. But the stock apears to be less risky and, when comparing its historical volatility, SBI Investment KOREA is 1.95 times less risky than Daekyung Machinery. The stock trades about -0.03 of its potential returns per unit of risk. The Daekyung Machinery Engineering is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 94,000 in Daekyung Machinery Engineering on August 31, 2024 and sell it today you would lose (42,500) from holding Daekyung Machinery Engineering or give up 45.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.45% |
| Values | Daily Returns |
SBI Investment KOREA vs. Daekyung Machinery Engineering
Performance |
| Timeline |
| SBI Investment KOREA |
| Daekyung Machinery |
SBI Investment and Daekyung Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Daekyung Machinery
The main advantage of trading using opposite SBI Investment and Daekyung Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Daekyung Machinery 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 Daekyung Machinery will offset losses from the drop in Daekyung Machinery's long position.| SBI Investment vs. Samsung Electronics Co | SBI Investment vs. Samsung Electronics Co | SBI Investment vs. KB Financial Group | SBI Investment vs. Shinhan Financial Group |
| Daekyung Machinery vs. EBEST Investment Securities | Daekyung Machinery vs. Daechang Steel Co | Daekyung Machinery vs. Lindeman Asia Investment | Daekyung Machinery vs. BooKook Steel Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |