Correlation Between Stic Investments and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Stic Investments and EBEST 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 Stic Investments and EBEST Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and EBEST Investment Securities, you can compare the effects of market volatilities on Stic Investments and EBEST 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 Stic Investments with a short position of EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and EBEST Investment.
Diversification Opportunities for Stic Investments and EBEST Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stic and EBEST is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec and Stic Investments 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 Stic Investments are associated (or correlated) with EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Stic Investments i.e., Stic Investments and EBEST Investment go up and down completely randomly.
Pair Corralation between Stic Investments and EBEST Investment
Assuming the 90 days trading horizon Stic Investments is expected to generate 1.07 times more return on investment than EBEST Investment. However, Stic Investments is 1.07 times more volatile than EBEST Investment Securities. It trades about 0.04 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about 0.02 per unit of risk. If you would invest 664,739 in Stic Investments on August 29, 2024 and sell it today you would earn a total of 135,261 from holding Stic Investments or generate 20.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. EBEST Investment Securities
Performance |
| Timeline |
| Stic Investments |
| EBEST Investment Sec |
Stic Investments and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and EBEST Investment
The main advantage of trading using opposite Stic Investments and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, EBEST 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Stic Investments vs. Korea Real Estate | Stic Investments vs. Korea Ratings Co | Stic Investments vs. IQuest Co | Stic Investments vs. Wonbang Tech Co |
| EBEST Investment vs. DB Insurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Pyung Hwa Industrial | EBEST Investment vs. Daiyang Metal Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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