Correlation Between SBI Investment and Eugene Technology
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Eugene 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 Eugene 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 Eugene Technology CoLtd, you can compare the effects of market volatilities on SBI Investment and Eugene 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 Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Eugene Technology.
Diversification Opportunities for SBI Investment and Eugene Technology
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and Eugene is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Eugene Technology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Technology CoLtd 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 Eugene Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Technology CoLtd has no effect on the direction of SBI Investment i.e., SBI Investment and Eugene Technology go up and down completely randomly.
Pair Corralation between SBI Investment and Eugene Technology
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.7 times more return on investment than Eugene Technology. However, SBI Investment is 1.7 times more volatile than Eugene Technology CoLtd. It trades about 0.14 of its potential returns per unit of risk. Eugene Technology CoLtd is currently generating about -0.06 per unit of risk. If you would invest 68,400 in SBI Investment KOREA on September 13, 2024 and sell it today you would earn a total of 10,700 from holding SBI Investment KOREA or generate 15.64% 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. Eugene Technology CoLtd
Performance |
| Timeline |
| SBI Investment KOREA |
| Eugene Technology CoLtd |
SBI Investment and Eugene Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Eugene Technology
The main advantage of trading using opposite SBI Investment and Eugene Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Eugene 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 Eugene Technology will offset losses from the drop in Eugene Technology'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 |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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