Correlation Between Next Entertainment and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Next Entertainment 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 Next Entertainment and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and SBI Investment KOREA, you can compare the effects of market volatilities on Next Entertainment 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 Next Entertainment with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and SBI Investment.
Diversification Opportunities for Next Entertainment and SBI Investment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Next and SBI is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World 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 Next Entertainment 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 Next Entertainment World 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 Next Entertainment i.e., Next Entertainment and SBI Investment go up and down completely randomly.
Pair Corralation between Next Entertainment and SBI Investment
Assuming the 90 days trading horizon Next Entertainment is expected to generate 11.91 times less return on investment than SBI Investment. In addition to that, Next Entertainment is 1.07 times more volatile than SBI Investment KOREA. It trades about 0.01 of its total potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.11 per unit of volatility. If you would invest 68,600 in SBI Investment KOREA on September 1, 2024 and sell it today you would earn a total of 4,300 from holding SBI Investment KOREA or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Entertainment World vs. SBI Investment KOREA
Performance |
| Timeline |
| Next Entertainment World |
| SBI Investment KOREA |
Next Entertainment and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and SBI Investment
The main advantage of trading using opposite Next Entertainment and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment 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.| Next Entertainment vs. AfreecaTV Co | Next Entertainment vs. Seegene | Next Entertainment vs. SS TECH | Next Entertainment vs. Busan Industrial Co |
| SBI Investment vs. Ssangyong Information Communication | SBI Investment vs. Sejong Telecom | SBI Investment vs. Wireless Power Amplifier | SBI Investment vs. Daishin Information Communications |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |