Correlation Between KTB Investment and SBI Investment
Can any of the company-specific risk be diversified away by investing in both KTB Investment and SBI 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 KTB Investment and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTB Investment Securities and SBI Investment KOREA, you can compare the effects of market volatilities on KTB Investment and SBI 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 KTB Investment with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and SBI Investment.
Diversification Opportunities for KTB Investment and SBI Investment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between KTB and SBI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA and KTB 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 KTB Investment Securities are associated (or correlated) with SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of KTB Investment i.e., KTB Investment and SBI Investment go up and down completely randomly.
Pair Corralation between KTB Investment and SBI Investment
Assuming the 90 days trading horizon KTB Investment is expected to generate 6.6 times less return on investment than SBI Investment. But when comparing it to its historical volatility, KTB Investment Securities is 3.29 times less risky than SBI Investment. It trades about 0.07 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 68,400 in SBI Investment KOREA on September 13, 2024 and sell it today you would earn a total of 10,700 from holding SBI Investment KOREA or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. SBI Investment KOREA
Performance |
| Timeline |
| KTB Investment Securities |
| SBI Investment KOREA |
KTB Investment and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and SBI Investment
The main advantage of trading using opposite KTB Investment and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, SBI 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| KTB Investment vs. Samsung Electronics Co | KTB Investment vs. Samsung Electronics Co | KTB Investment vs. SK Hynix | KTB Investment vs. POSCO Holdings |
| SBI Investment vs. KB Financial Group | SBI Investment vs. Shinhan Financial Group | SBI Investment vs. Hana Financial | SBI Investment vs. Woori Financial Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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