Correlation Between SBI Investment and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both SBI Investment and NewFlex 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 NewFlex 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 NewFlex Technology Co, you can compare the effects of market volatilities on SBI Investment and NewFlex 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and NewFlex Technology.
Diversification Opportunities for SBI Investment and NewFlex Technology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and NewFlex is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of SBI Investment i.e., SBI Investment and NewFlex Technology go up and down completely randomly.
Pair Corralation between SBI Investment and NewFlex Technology
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.22 times more return on investment than NewFlex Technology. However, SBI Investment is 1.22 times more volatile than NewFlex Technology Co. It trades about 0.12 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.25 per unit of risk. If you would invest 65,800 in SBI Investment KOREA on August 28, 2024 and sell it today you would earn a total of 4,400 from holding SBI Investment KOREA or generate 6.69% 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. NewFlex Technology Co
Performance |
| Timeline |
| SBI Investment KOREA |
| NewFlex Technology |
SBI Investment and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and NewFlex Technology
The main advantage of trading using opposite SBI Investment and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, NewFlex 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| SBI Investment vs. Daekyung Machinery Engineering | SBI Investment vs. PlayD Co | SBI Investment vs. Playgram Co | SBI Investment vs. Camus Engineering Construction |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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