Correlation Between SBI Investment and JC Chemical
Can any of the company-specific risk be diversified away by investing in both SBI Investment and JC Chemical 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 JC Chemical 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 JC Chemical Co, you can compare the effects of market volatilities on SBI Investment and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and JC Chemical.
Diversification Opportunities for SBI Investment and JC Chemical
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and 137950 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of SBI Investment i.e., SBI Investment and JC Chemical go up and down completely randomly.
Pair Corralation between SBI Investment and JC Chemical
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.81 times more return on investment than JC Chemical. However, SBI Investment is 1.81 times more volatile than JC Chemical Co. It trades about 0.12 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.38 per unit of risk. If you would invest 70,300 in SBI Investment KOREA on September 12, 2024 and sell it today you would earn a total of 8,800 from holding SBI Investment KOREA or generate 12.52% 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. JC Chemical Co
Performance |
| Timeline |
| SBI Investment KOREA |
| JC Chemical |
SBI Investment and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and JC Chemical
The main advantage of trading using opposite SBI Investment and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical'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 |
| JC Chemical vs. LockLock Co | JC Chemical vs. Woori Financial Group | JC Chemical vs. Jb Financial | JC Chemical vs. Nh Investment And |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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