Correlation Between SBI Investment and Grand Korea
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Grand Korea 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 Grand Korea 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 Grand Korea Leisure, you can compare the effects of market volatilities on SBI Investment and Grand Korea 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 Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Grand Korea.
Diversification Opportunities for SBI Investment and Grand Korea
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SBI and Grand is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Grand Korea Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Korea Leisure 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 Grand Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Korea Leisure has no effect on the direction of SBI Investment i.e., SBI Investment and Grand Korea go up and down completely randomly.
Pair Corralation between SBI Investment and Grand Korea
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.16 times more return on investment than Grand Korea. However, SBI Investment is 1.16 times more volatile than Grand Korea Leisure. It trades about -0.02 of its potential returns per unit of risk. Grand Korea Leisure is currently generating about -0.04 per unit of risk. If you would invest 109,100 in SBI Investment KOREA on November 27, 2024 and sell it today you would lose (33,000) from holding SBI Investment KOREA or give up 30.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Grand Korea Leisure
Performance |
| Timeline |
| SBI Investment KOREA |
| Grand Korea Leisure |
SBI Investment and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Grand Korea
The main advantage of trading using opposite SBI Investment and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Grand Korea 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 Grand Korea will offset losses from the drop in Grand Korea's long position.| SBI Investment vs. NH Investment Securities | SBI Investment vs. Eugene Investment Securities | SBI Investment vs. LB Investment | SBI Investment vs. Sangsangin Investment Securities |
| Grand Korea vs. Dongbang Ship Machinery | Grand Korea vs. Daewoo Engineering Construction | Grand Korea vs. Lotte Rental Co | Grand Korea vs. Woorim Machinery 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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