Correlation Between SBI Investment and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on SBI Investment and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Foodnamoo.
Diversification Opportunities for SBI Investment and Foodnamoo
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and Foodnamoo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of SBI Investment i.e., SBI Investment and Foodnamoo go up and down completely randomly.
Pair Corralation between SBI Investment and Foodnamoo
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 1.79 times more return on investment than Foodnamoo. However, SBI Investment is 1.79 times more volatile than Foodnamoo. It trades about 0.09 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.14 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 5,600 from holding SBI Investment KOREA or generate 7.97% 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. Foodnamoo
Performance |
| Timeline |
| SBI Investment KOREA |
| Foodnamoo |
SBI Investment and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Foodnamoo
The main advantage of trading using opposite SBI Investment and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo'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 |
| Foodnamoo vs. Solution Advanced Technology | Foodnamoo vs. Busan Industrial Co | Foodnamoo vs. Busan Ind | Foodnamoo vs. Sam Chun Dang |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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