Correlation Between SBI Investment and LB Investment
Can any of the company-specific risk be diversified away by investing in both SBI Investment and LB Investment 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 LB Investment 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 LB Investment, you can compare the effects of market volatilities on SBI Investment and LB Investment 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 LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and LB Investment.
Diversification Opportunities for SBI Investment and LB Investment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and 309960 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment 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 LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of SBI Investment i.e., SBI Investment and LB Investment go up and down completely randomly.
Pair Corralation between SBI Investment and LB Investment
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 3.06 times more return on investment than LB Investment. However, SBI Investment is 3.06 times more volatile than LB Investment. It trades about 0.16 of its potential returns per unit of risk. LB Investment is currently generating about -0.13 per unit of risk. If you would invest 65,800 in SBI Investment KOREA on August 29, 2024 and sell it today you would earn a total of 6,600 from holding SBI Investment KOREA or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. LB Investment
Performance |
| Timeline |
| SBI Investment KOREA |
| LB Investment |
SBI Investment and LB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and LB Investment
The main advantage of trading using opposite SBI Investment and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.| SBI Investment vs. Daekyung Machinery Engineering | SBI Investment vs. PlayD Co | SBI Investment vs. Playgram Co | SBI Investment vs. Camus Engineering Construction |
| LB Investment vs. Samsung Electronics Co | LB Investment vs. Samsung Electronics Co | LB Investment vs. LG Energy Solution | LB Investment vs. SK Hynix |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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