Correlation Between Sungdo Engineering and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering 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 Sungdo Engineering and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and SBI Investment KOREA, you can compare the effects of market volatilities on Sungdo Engineering 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 Sungdo Engineering with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and SBI Investment.
Diversification Opportunities for Sungdo Engineering and SBI Investment
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sungdo and SBI is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio 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 Sungdo Engineering 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 Sungdo Engineering Construction 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 Sungdo Engineering i.e., Sungdo Engineering and SBI Investment go up and down completely randomly.
Pair Corralation between Sungdo Engineering and SBI Investment
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to under-perform the SBI Investment. But the stock apears to be less risky and, when comparing its historical volatility, Sungdo Engineering Construction is 1.19 times less risky than SBI Investment. The stock trades about -0.49 of its potential returns per unit of risk. The SBI Investment KOREA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 76,100 in SBI Investment KOREA on October 30, 2024 and sell it today you would earn a total of 1,100 from holding SBI Investment KOREA or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. SBI Investment KOREA
Performance |
| Timeline |
| Sungdo Engineering |
| SBI Investment KOREA |
Sungdo Engineering and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and SBI Investment
The main advantage of trading using opposite Sungdo Engineering and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering 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.| Sungdo Engineering vs. Alton Sports CoLtd | Sungdo Engineering vs. Isu Chemical Co | Sungdo Engineering vs. Kukdong Oil Chemicals | Sungdo Engineering vs. Neungyule Education |
| SBI Investment vs. Union Materials Corp | SBI Investment vs. INNOX Advanced Materials | SBI Investment vs. LG Household Healthcare | SBI Investment vs. Top Material 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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