Correlation Between SBI Investment and Cosmax
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Cosmax 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 Cosmax 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 Cosmax Inc, you can compare the effects of market volatilities on SBI Investment and Cosmax 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 Cosmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Cosmax.
Diversification Opportunities for SBI Investment and Cosmax
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and Cosmax is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Cosmax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmax Inc 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 Cosmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmax Inc has no effect on the direction of SBI Investment i.e., SBI Investment and Cosmax go up and down completely randomly.
Pair Corralation between SBI Investment and Cosmax
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 0.88 times more return on investment than Cosmax. However, SBI Investment KOREA is 1.14 times less risky than Cosmax. It trades about 0.09 of its potential returns per unit of risk. Cosmax Inc is currently generating about -0.12 per unit of risk. If you would invest 69,100 in SBI Investment KOREA on August 31, 2024 and sell it today you would earn a total of 3,300 from holding SBI Investment KOREA or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SBI Investment KOREA vs. Cosmax Inc
Performance |
| Timeline |
| SBI Investment KOREA |
| Cosmax Inc |
SBI Investment and Cosmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Cosmax
The main advantage of trading using opposite SBI Investment and Cosmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Cosmax 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 Cosmax will offset losses from the drop in Cosmax's long position.| SBI Investment vs. Samsung Electronics Co | SBI Investment vs. Samsung Electronics Co | SBI Investment vs. KB Financial Group | SBI Investment vs. Shinhan Financial Group |
| Cosmax vs. E Investment Development | Cosmax vs. Haitai Confectionery Foods | Cosmax vs. SBI Investment KOREA | Cosmax vs. Woori Technology Investment |
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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