Correlation Between AhnLab and SBI Investment
Can any of the company-specific risk be diversified away by investing in both AhnLab 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 AhnLab and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AhnLab Inc and SBI Investment KOREA, you can compare the effects of market volatilities on AhnLab 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 AhnLab with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AhnLab and SBI Investment.
Diversification Opportunities for AhnLab and SBI Investment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AhnLab and SBI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AhnLab Inc 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 AhnLab 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 AhnLab Inc 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 AhnLab i.e., AhnLab and SBI Investment go up and down completely randomly.
Pair Corralation between AhnLab and SBI Investment
Assuming the 90 days trading horizon AhnLab Inc is expected to generate 1.04 times more return on investment than SBI Investment. However, AhnLab is 1.04 times more volatile than SBI Investment KOREA. It trades about 0.01 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.03 per unit of risk. If you would invest 6,223,854 in AhnLab Inc on September 3, 2024 and sell it today you would lose (253,854) from holding AhnLab Inc or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AhnLab Inc vs. SBI Investment KOREA
Performance |
| Timeline |
| AhnLab Inc |
| SBI Investment KOREA |
AhnLab and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AhnLab and SBI Investment
The main advantage of trading using opposite AhnLab and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AhnLab 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.The idea behind AhnLab Inc and SBI Investment KOREA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SBI Investment vs. Dongjin Semichem Co | SBI Investment vs. AhnLab Inc | SBI Investment vs. Posco ICT | SBI Investment vs. CJ ENM |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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