Correlation Between SBI Investment and CU Tech
Can any of the company-specific risk be diversified away by investing in both SBI Investment and CU Tech 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 CU Tech 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 CU Tech Corp, you can compare the effects of market volatilities on SBI Investment and CU Tech 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 CU Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and CU Tech.
Diversification Opportunities for SBI Investment and CU Tech
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and 376290 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and CU Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Tech Corp 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 CU Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Tech Corp has no effect on the direction of SBI Investment i.e., SBI Investment and CU Tech go up and down completely randomly.
Pair Corralation between SBI Investment and CU Tech
Assuming the 90 days trading horizon SBI Investment is expected to generate 1.62 times less return on investment than CU Tech. In addition to that, SBI Investment is 2.36 times more volatile than CU Tech Corp. It trades about 0.04 of its total potential returns per unit of risk. CU Tech Corp is currently generating about 0.17 per unit of volatility. If you would invest 286,500 in CU Tech Corp on October 30, 2024 and sell it today you would earn a total of 8,500 from holding CU Tech Corp or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. CU Tech Corp
Performance |
| Timeline |
| SBI Investment KOREA |
| CU Tech Corp |
SBI Investment and CU Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and CU Tech
The main advantage of trading using opposite SBI Investment and CU Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, CU Tech 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 CU Tech will offset losses from the drop in CU Tech's long position.| SBI Investment vs. Union Materials Corp | SBI Investment vs. INNOX Advanced Materials | SBI Investment vs. LG Household Healthcare | SBI Investment vs. Top Material Co |
| CU Tech vs. Sempio Foods Co | CU Tech vs. Ecoplastic | CU Tech vs. Hankukpackage Co | CU Tech vs. WONIK Materials CoLtd |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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