Correlation Between Mobile Appliance and CBI
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and CBI 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 Mobile Appliance and CBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and CBI Co, you can compare the effects of market volatilities on Mobile Appliance and CBI 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 Mobile Appliance with a short position of CBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and CBI.
Diversification Opportunities for Mobile Appliance and CBI
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mobile and CBI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and CBI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBI Co and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with CBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBI Co has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and CBI go up and down completely randomly.
Pair Corralation between Mobile Appliance and CBI
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 0.8 times more return on investment than CBI. However, Mobile Appliance is 1.25 times less risky than CBI. It trades about 0.0 of its potential returns per unit of risk. CBI Co is currently generating about -0.06 per unit of risk. If you would invest 292,500 in Mobile Appliance on August 31, 2024 and sell it today you would lose (71,500) from holding Mobile Appliance or give up 24.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.46% |
| Values | Daily Returns |
Mobile Appliance vs. CBI Co
Performance |
| Timeline |
| Mobile Appliance |
| CBI Co |
Mobile Appliance and CBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and CBI
The main advantage of trading using opposite Mobile Appliance and CBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, CBI 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 CBI will offset losses from the drop in CBI's long position.| Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. LG Energy Solution | Mobile Appliance vs. SK Hynix |
| CBI vs. Cheryong Industrial CoLtd | CBI vs. ECSTELECOM Co | CBI vs. Shinsegae Information Communication | CBI vs. Kumho 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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