Correlation Between SBI Investment and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on SBI Investment and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Taegu Broadcasting.
Diversification Opportunities for SBI Investment and Taegu Broadcasting
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and Taegu is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of SBI Investment i.e., SBI Investment and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between SBI Investment and Taegu Broadcasting
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the Taegu Broadcasting. In addition to that, SBI Investment is 1.58 times more volatile than Taegu Broadcasting. It trades about -0.01 of its total potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.01 per unit of volatility. If you would invest 103,982 in Taegu Broadcasting on September 14, 2024 and sell it today you would lose (12,482) from holding Taegu Broadcasting or give up 12.0% 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. Taegu Broadcasting
Performance |
| Timeline |
| SBI Investment KOREA |
| Taegu Broadcasting |
SBI Investment and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Taegu Broadcasting
The main advantage of trading using opposite SBI Investment and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| SBI Investment vs. KB Financial Group | SBI Investment vs. Shinhan Financial Group | SBI Investment vs. Hana Financial | SBI Investment vs. Woori Financial Group |
| Taegu Broadcasting vs. Golden Bridge Investment | Taegu Broadcasting vs. SBI Investment KOREA | Taegu Broadcasting vs. Lotte Data Communication | Taegu Broadcasting vs. Woori Technology Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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