Correlation Between SBI Investment and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Hwangkum 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 Hwangkum 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 Hwangkum Steel Technology, you can compare the effects of market volatilities on SBI Investment and Hwangkum 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 Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Hwangkum Steel.
Diversification Opportunities for SBI Investment and Hwangkum Steel
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and Hwangkum is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel 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 Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of SBI Investment i.e., SBI Investment and Hwangkum Steel go up and down completely randomly.
Pair Corralation between SBI Investment and Hwangkum Steel
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.37 times more return on investment than Hwangkum Steel. However, SBI Investment is 1.37 times more volatile than Hwangkum Steel Technology. It trades about -0.01 of its potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.03 per unit of risk. If you would invest 106,500 in SBI Investment KOREA on September 26, 2024 and sell it today you would lose (29,000) from holding SBI Investment KOREA or give up 27.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Hwangkum Steel Technology
Performance |
| Timeline |
| SBI Investment KOREA |
| Hwangkum Steel Technology |
SBI Investment and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Hwangkum Steel
The main advantage of trading using opposite SBI Investment and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Hwangkum 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| SBI Investment vs. KB Financial Group | SBI Investment vs. Shinhan Financial Group | SBI Investment vs. Hyundai Motor | SBI Investment vs. Hyundai Motor Co |
| Hwangkum Steel vs. Stic Investments | Hwangkum Steel vs. Polaris Office Corp | Hwangkum Steel vs. SBI Investment KOREA | Hwangkum Steel vs. Dongil Metal 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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