Correlation Between Korea Information and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Korea Information and Daewoo SBI 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 Korea Information and Daewoo SBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Daewoo SBI SPAC, you can compare the effects of market volatilities on Korea Information and Daewoo SBI 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 Korea Information with a short position of Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Daewoo SBI.
Diversification Opportunities for Korea Information and Daewoo SBI
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Daewoo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC and Korea Information 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 Korea Information Communications are associated (or correlated) with Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of Korea Information i.e., Korea Information and Daewoo SBI go up and down completely randomly.
Pair Corralation between Korea Information and Daewoo SBI
Assuming the 90 days trading horizon Korea Information Communications is expected to generate 0.49 times more return on investment than Daewoo SBI. However, Korea Information Communications is 2.04 times less risky than Daewoo SBI. It trades about 0.01 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.28 per unit of risk. If you would invest 818,000 in Korea Information Communications on August 31, 2024 and sell it today you would earn a total of 1,000.00 from holding Korea Information Communications or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Daewoo SBI SPAC
Performance |
| Timeline |
| Korea Information |
| Daewoo SBI SPAC |
Korea Information and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Daewoo SBI
The main advantage of trading using opposite Korea Information and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI's long position.| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
| Daewoo SBI vs. Korea Information Communications | Daewoo SBI vs. Air Busan Co | Daewoo SBI vs. Shinsegae Information Communication | Daewoo SBI vs. Cloud Air 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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