Correlation Between Korea Aerospace and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Korea Aerospace 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 Korea Aerospace and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Aerospace Industries and SBI Investment KOREA, you can compare the effects of market volatilities on Korea Aerospace 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 Korea Aerospace with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Aerospace and SBI Investment.
Diversification Opportunities for Korea Aerospace and SBI Investment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and SBI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Korea Aerospace Industries 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 Korea Aerospace 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 Korea Aerospace Industries 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 Korea Aerospace i.e., Korea Aerospace and SBI Investment go up and down completely randomly.
Pair Corralation between Korea Aerospace and SBI Investment
Assuming the 90 days trading horizon Korea Aerospace is expected to generate 1.31 times less return on investment than SBI Investment. In addition to that, Korea Aerospace is 1.13 times more volatile than SBI Investment KOREA. It trades about 0.11 of its total potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.16 per unit of volatility. If you would invest 65,800 in SBI Investment KOREA on August 29, 2024 and sell it today you would earn a total of 6,600 from holding SBI Investment KOREA or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Aerospace Industries vs. SBI Investment KOREA
Performance |
| Timeline |
| Korea Aerospace Indu |
| SBI Investment KOREA |
Korea Aerospace and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Aerospace and SBI Investment
The main advantage of trading using opposite Korea Aerospace and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Aerospace 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.| Korea Aerospace vs. Samsung Electronics Co | Korea Aerospace vs. Samsung Electronics Co | Korea Aerospace vs. KB Financial Group | Korea Aerospace vs. Shinhan Financial Group |
| SBI Investment vs. Sunny Electronics Corp | SBI Investment vs. DAEDUCK ELECTRONICS CoLtd | SBI Investment vs. Genie Music | SBI Investment vs. Anam Electronics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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