Correlation Between SBI Investment and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Puloon 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 Puloon 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 Puloon Technology, you can compare the effects of market volatilities on SBI Investment and Puloon 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Puloon Technology.
Diversification Opportunities for SBI Investment and Puloon Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and Puloon is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of SBI Investment i.e., SBI Investment and Puloon Technology go up and down completely randomly.
Pair Corralation between SBI Investment and Puloon Technology
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.35 times more return on investment than Puloon Technology. However, SBI Investment is 1.35 times more volatile than Puloon Technology. It trades about 0.09 of its potential returns per unit of risk. Puloon Technology is currently generating about -0.08 per unit of risk. If you would invest 67,000 in SBI Investment KOREA on August 25, 2024 and sell it today you would earn a total of 3,400 from holding SBI Investment KOREA or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Puloon Technology
Performance |
| Timeline |
| SBI Investment KOREA |
| Puloon Technology |
SBI Investment and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Puloon Technology
The main advantage of trading using opposite SBI Investment and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Puloon 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.| SBI Investment vs. Korea New Network | SBI Investment vs. Dong A Eltek | SBI Investment vs. Dreamus Company | SBI Investment vs. SK Bioscience Co |
| Puloon Technology vs. Korea Real Estate | Puloon Technology vs. Korea Ratings Co | Puloon Technology vs. IQuest Co | Puloon Technology vs. Wonbang Tech 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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