Correlation Between SBI Investment and Bookook Steel
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Bookook Steel 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 Bookook Steel 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 Bookook Steel, you can compare the effects of market volatilities on SBI Investment and Bookook Steel 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 Bookook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Bookook Steel.
Diversification Opportunities for SBI Investment and Bookook Steel
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and Bookook is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Bookook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bookook Steel 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 Bookook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bookook Steel has no effect on the direction of SBI Investment i.e., SBI Investment and Bookook Steel go up and down completely randomly.
Pair Corralation between SBI Investment and Bookook Steel
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the Bookook Steel. But the stock apears to be less risky and, when comparing its historical volatility, SBI Investment KOREA is 1.1 times less risky than Bookook Steel. The stock trades about -0.05 of its potential returns per unit of risk. The Bookook Steel is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 242,500 in Bookook Steel on October 19, 2024 and sell it today you would earn a total of 15,000 from holding Bookook Steel or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Bookook Steel
Performance |
| Timeline |
| SBI Investment KOREA |
| Bookook Steel |
SBI Investment and Bookook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Bookook Steel
The main advantage of trading using opposite SBI Investment and Bookook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Bookook Steel 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 Bookook Steel will offset losses from the drop in Bookook Steel's long position.| SBI Investment vs. Heungkuk Metaltech CoLtd | SBI Investment vs. Digital Imaging Technology | SBI Investment vs. NewFlex Technology Co | SBI Investment vs. Seers Technology |
| Bookook Steel vs. BIT Computer Co | Bookook Steel vs. Koh Young Technology | Bookook Steel vs. SBI Investment KOREA | Bookook Steel vs. AeroSpace Technology of |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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