Correlation Between EBEST Investment and Aju IB
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Aju IB 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 EBEST Investment and Aju IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Aju IB Investment, you can compare the effects of market volatilities on EBEST Investment and Aju IB 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 EBEST Investment with a short position of Aju IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Aju IB.
Diversification Opportunities for EBEST Investment and Aju IB
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and Aju is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Aju IB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aju IB Investment and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Aju IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aju IB Investment has no effect on the direction of EBEST Investment i.e., EBEST Investment and Aju IB go up and down completely randomly.
Pair Corralation between EBEST Investment and Aju IB
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.43 times more return on investment than Aju IB. However, EBEST Investment Securities is 2.3 times less risky than Aju IB. It trades about -0.04 of its potential returns per unit of risk. Aju IB Investment is currently generating about -0.02 per unit of risk. If you would invest 416,000 in EBEST Investment Securities on October 23, 2024 and sell it today you would lose (14,500) from holding EBEST Investment Securities or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Aju IB Investment
Performance |
| Timeline |
| EBEST Investment Sec |
| Aju IB Investment |
EBEST Investment and Aju IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Aju IB
The main advantage of trading using opposite EBEST Investment and Aju IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Aju IB 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 Aju IB will offset losses from the drop in Aju IB's long position.| EBEST Investment vs. Samsung Electronics Co | EBEST Investment vs. Samsung Electronics Co | EBEST Investment vs. Naver | EBEST Investment vs. SK Hynix |
| Aju IB vs. Atinum Investment Co | Aju IB vs. SBI Investment KOREA | Aju IB vs. Daesung Private Equity | Aju IB vs. Busan Industrial 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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