Correlation Between Union Materials and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Union Materials 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 Union Materials and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Materials Corp and SBI Investment KOREA, you can compare the effects of market volatilities on Union Materials 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 Union Materials with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Materials and SBI Investment.
Diversification Opportunities for Union Materials and SBI Investment
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and SBI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Union Materials Corp 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 Union Materials 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 Union Materials Corp 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 Union Materials i.e., Union Materials and SBI Investment go up and down completely randomly.
Pair Corralation between Union Materials and SBI Investment
Assuming the 90 days trading horizon Union Materials Corp is expected to generate 1.77 times more return on investment than SBI Investment. However, Union Materials is 1.77 times more volatile than SBI Investment KOREA. It trades about -0.15 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.3 per unit of risk. If you would invest 235,000 in Union Materials Corp on November 7, 2024 and sell it today you would lose (14,500) from holding Union Materials Corp or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Materials Corp vs. SBI Investment KOREA
Performance |
| Timeline |
| Union Materials Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| SBI Investment KOREA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Union Materials and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Materials and SBI Investment
The main advantage of trading using opposite Union Materials and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Materials 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.| Union Materials vs. MediaZen | Union Materials vs. Hanil Chemical Ind | Union Materials vs. JYP Entertainment Corp | Union Materials vs. Kaonmedia Co |
| SBI Investment vs. Digital Imaging Technology | SBI Investment vs. MediaZen | SBI Investment vs. Daou Technology | SBI Investment vs. Woori Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |