Correlation Between People Technology and SBI Investment
Can any of the company-specific risk be diversified away by investing in both People Technology 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 People Technology and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and SBI Investment KOREA, you can compare the effects of market volatilities on People Technology 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 People Technology with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and SBI Investment.
Diversification Opportunities for People Technology and SBI Investment
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between People and SBI is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding People Technology 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 People Technology 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 People Technology 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 People Technology i.e., People Technology and SBI Investment go up and down completely randomly.
Pair Corralation between People Technology and SBI Investment
Assuming the 90 days trading horizon People Technology is expected to under-perform the SBI Investment. In addition to that, People Technology is 1.3 times more volatile than SBI Investment KOREA. It trades about -0.13 of its total potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.12 per unit of volatility. If you would invest 65,800 in SBI Investment KOREA on August 28, 2024 and sell it today you would earn a total of 4,400 from holding SBI Investment KOREA or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
People Technology vs. SBI Investment KOREA
Performance |
| Timeline |
| People Technology |
| SBI Investment KOREA |
People Technology and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and SBI Investment
The main advantage of trading using opposite People Technology and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology 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.| People Technology vs. Samsung Electronics Co | People Technology vs. Samsung Electronics Co | People Technology vs. Hyundai Motor Co | People Technology vs. Hyundai Motor |
| SBI Investment vs. Daekyung Machinery Engineering | SBI Investment vs. PlayD Co | SBI Investment vs. Playgram Co | SBI Investment vs. Camus Engineering Construction |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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