Correlation Between Daewoo SBI and Eugene Investment
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Eugene 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 Daewoo SBI and Eugene Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Eugene Investment Securities, you can compare the effects of market volatilities on Daewoo SBI and Eugene 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 Daewoo SBI with a short position of Eugene Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Eugene Investment.
Diversification Opportunities for Daewoo SBI and Eugene Investment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewoo and Eugene is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Eugene Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Investment and Daewoo SBI 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 Daewoo SBI SPAC are associated (or correlated) with Eugene Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Investment has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Eugene Investment go up and down completely randomly.
Pair Corralation between Daewoo SBI and Eugene Investment
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 0.59 times more return on investment than Eugene Investment. However, Daewoo SBI SPAC is 1.7 times less risky than Eugene Investment. It trades about -0.06 of its potential returns per unit of risk. Eugene Investment Securities is currently generating about -0.04 per unit of risk. If you would invest 381,500 in Daewoo SBI SPAC on November 3, 2024 and sell it today you would lose (110,000) from holding Daewoo SBI SPAC or give up 28.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Eugene Investment Securities
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Eugene Investment |
Daewoo SBI and Eugene Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Eugene Investment
The main advantage of trading using opposite Daewoo SBI and Eugene Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Eugene 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 Eugene Investment will offset losses from the drop in Eugene Investment's long position.| Daewoo SBI vs. Automobile Pc | Daewoo SBI vs. Daejung Chemicals Metals | Daewoo SBI vs. Formetal Co | Daewoo SBI vs. Korea Information Communications |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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