Correlation Between SBI Investment and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Kbi Metal 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 Kbi Metal 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 Kbi Metal Co, you can compare the effects of market volatilities on SBI Investment and Kbi Metal 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 Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Kbi Metal.
Diversification Opportunities for SBI Investment and Kbi Metal
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and Kbi is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of SBI Investment i.e., SBI Investment and Kbi Metal go up and down completely randomly.
Pair Corralation between SBI Investment and Kbi Metal
Assuming the 90 days trading horizon SBI Investment is expected to generate 76.72 times less return on investment than Kbi Metal. But when comparing it to its historical volatility, SBI Investment KOREA is 2.05 times less risky than Kbi Metal. It trades about 0.0 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 137,900 in Kbi Metal Co on November 3, 2024 and sell it today you would earn a total of 78,600 from holding Kbi Metal Co or generate 57.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
SBI Investment KOREA vs. Kbi Metal Co
Performance |
| Timeline |
| SBI Investment KOREA |
| Kbi Metal |
SBI Investment and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Kbi Metal
The main advantage of trading using opposite SBI Investment and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| SBI Investment vs. Sam Yang Foods | SBI Investment vs. Korea Information Engineering | SBI Investment vs. Insung Information Co | SBI Investment vs. DB Financial Investment |
| Kbi Metal vs. Namhwa Industrial Co | Kbi Metal vs. PJ Metal Co | Kbi Metal vs. Seoul Food Industrial | Kbi Metal vs. SCI Information Service |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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