Correlation Between SBI Investment and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both SBI Investment and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on SBI Investment and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and SEOJEON ELECTRIC.
Diversification Opportunities for SBI Investment and SEOJEON ELECTRIC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and SEOJEON is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of SBI Investment i.e., SBI Investment and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between SBI Investment and SEOJEON ELECTRIC
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.2 times more return on investment than SEOJEON ELECTRIC. However, SBI Investment is 1.2 times more volatile than SEOJEON ELECTRIC MACHINERY. It trades about 0.11 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about -0.15 per unit of risk. If you would invest 68,600 in SBI Investment KOREA on September 1, 2024 and sell it today you would earn a total of 4,300 from holding SBI Investment KOREA or generate 6.27% 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. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| SBI Investment KOREA |
| SEOJEON ELECTRIC MAC |
SBI Investment and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and SEOJEON ELECTRIC
The main advantage of trading using opposite SBI Investment and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| SBI Investment vs. Ssangyong Information Communication | SBI Investment vs. Sejong Telecom | SBI Investment vs. Wireless Power Amplifier | SBI Investment vs. Daishin Information Communications |
| SEOJEON ELECTRIC vs. Dongil Technology | SEOJEON ELECTRIC vs. Lotte Energy Materials | SEOJEON ELECTRIC vs. PI Advanced Materials | SEOJEON ELECTRIC vs. Daou Technology |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |