Correlation Between Microfriend and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Microfriend and Daewoo SBI 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 Microfriend and Daewoo SBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Daewoo SBI SPAC, you can compare the effects of market volatilities on Microfriend and Daewoo SBI 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 Microfriend with a short position of Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Daewoo SBI.
Diversification Opportunities for Microfriend and Daewoo SBI
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microfriend and Daewoo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC and Microfriend 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 Microfriend are associated (or correlated) with Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of Microfriend i.e., Microfriend and Daewoo SBI go up and down completely randomly.
Pair Corralation between Microfriend and Daewoo SBI
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Daewoo SBI. In addition to that, Microfriend is 2.4 times more volatile than Daewoo SBI SPAC. It trades about -0.25 of its total potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.23 per unit of volatility. If you would invest 265,000 in Daewoo SBI SPAC on August 28, 2024 and sell it today you would lose (24,000) from holding Daewoo SBI SPAC or give up 9.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Daewoo SBI SPAC
Performance |
| Timeline |
| Microfriend |
| Daewoo SBI SPAC |
Microfriend and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Daewoo SBI
The main advantage of trading using opposite Microfriend and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI's long position.| Microfriend vs. SK Hynix | Microfriend vs. People Technology | Microfriend vs. SIMMTECH Co | Microfriend vs. Haesung DS Co |
| Daewoo SBI vs. Deutsch Motors | Daewoo SBI vs. Hanjinkal | Daewoo SBI vs. Busan Industrial Co | Daewoo SBI vs. Busan Ind |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |