Correlation Between Sejong Telecom and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom 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 Sejong Telecom and Daewoo SBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Daewoo SBI SPAC, you can compare the effects of market volatilities on Sejong Telecom 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 Sejong Telecom with a short position of Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Daewoo SBI.
Diversification Opportunities for Sejong Telecom and Daewoo SBI
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sejong and Daewoo is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom i.e., Sejong Telecom and Daewoo SBI go up and down completely randomly.
Pair Corralation between Sejong Telecom and Daewoo SBI
Assuming the 90 days trading horizon Sejong Telecom is expected to generate 1.78 times more return on investment than Daewoo SBI. However, Sejong Telecom is 1.78 times more volatile than Daewoo SBI SPAC. It trades about -0.02 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.07 per unit of risk. If you would invest 61,156 in Sejong Telecom on September 1, 2024 and sell it today you would lose (17,056) from holding Sejong Telecom or give up 27.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.42% |
| Values | Daily Returns |
Sejong Telecom vs. Daewoo SBI SPAC
Performance |
| Timeline |
| Sejong Telecom |
| Daewoo SBI SPAC |
Sejong Telecom and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and Daewoo SBI
The main advantage of trading using opposite Sejong Telecom and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom 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.| Sejong Telecom vs. AfreecaTV Co | Sejong Telecom vs. Seegene | Sejong Telecom vs. SS TECH | Sejong Telecom vs. Busan Industrial Co |
| Daewoo SBI vs. Choil Aluminum | Daewoo SBI vs. Cube Entertainment | Daewoo SBI vs. Kbi Metal Co | Daewoo SBI vs. Asiana Airlines |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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