Correlation Between SBI Investment and DB Financial
Can any of the company-specific risk be diversified away by investing in both SBI Investment and DB Financial 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 DB Financial 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 DB Financial Investment, you can compare the effects of market volatilities on SBI Investment and DB Financial 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 DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and DB Financial.
Diversification Opportunities for SBI Investment and DB Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBI and 016610 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment 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 DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of SBI Investment i.e., SBI Investment and DB Financial go up and down completely randomly.
Pair Corralation between SBI Investment and DB Financial
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the DB Financial. In addition to that, SBI Investment is 1.83 times more volatile than DB Financial Investment. It trades about -0.2 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.55 per unit of volatility. If you would invest 532,000 in DB Financial Investment on November 18, 2024 and sell it today you would earn a total of 53,000 from holding DB Financial Investment or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. DB Financial Investment
Performance |
| Timeline |
| SBI Investment KOREA |
| DB Financial Investment |
SBI Investment and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and DB Financial
The main advantage of trading using opposite SBI Investment and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| SBI Investment vs. SK Chemicals Co | SBI Investment vs. Korea Investment Holdings | SBI Investment vs. Daejung Chemicals Metals | SBI Investment vs. Seoam Machinery Industry |
| DB Financial vs. JYP Entertainment Corp | DB Financial vs. Next Entertainment World | DB Financial vs. Koryo Credit Information | DB Financial vs. DC Media 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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