Correlation Between SBI Investment and Daou Technology
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Daou Technology 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 Daou Technology 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 Daou Technology, you can compare the effects of market volatilities on SBI Investment and Daou Technology 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 Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Daou Technology.
Diversification Opportunities for SBI Investment and Daou Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and Daou is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of SBI Investment i.e., SBI Investment and Daou Technology go up and down completely randomly.
Pair Corralation between SBI Investment and Daou Technology
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the Daou Technology. In addition to that, SBI Investment is 1.7 times more volatile than Daou Technology. It trades about -0.4 of its total potential returns per unit of risk. Daou Technology is currently generating about -0.13 per unit of volatility. If you would invest 1,796,000 in Daou Technology on November 6, 2024 and sell it today you would lose (36,000) from holding Daou Technology or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Daou Technology
Performance |
| Timeline |
| SBI Investment KOREA |
| Daou Technology |
SBI Investment and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Daou Technology
The main advantage of trading using opposite SBI Investment and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Daou Technology 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 Daou Technology will offset losses from the drop in Daou Technology's long position.| SBI Investment vs. Hana Financial | SBI Investment vs. KB Financial Group | SBI Investment vs. Ssangyong Information Communication | SBI Investment vs. Daishin Information Communications |
| Daou Technology vs. Hyundai Home Shopping | Daou Technology vs. Sempio Foods Co | Daou Technology vs. Innowireless Co | Daou Technology vs. Inzi Display CoLtd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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