Correlation Between Daewoo SBI and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Kumho Ind 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 Kumho Ind 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 Kumho Ind, you can compare the effects of market volatilities on Daewoo SBI and Kumho Ind 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 Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Kumho Ind.
Diversification Opportunities for Daewoo SBI and Kumho Ind
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daewoo and Kumho is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind 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 Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Kumho Ind go up and down completely randomly.
Pair Corralation between Daewoo SBI and Kumho Ind
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 1.0 times more return on investment than Kumho Ind. However, Daewoo SBI is 1.0 times more volatile than Kumho Ind. It trades about 0.06 of its potential returns per unit of risk. Kumho Ind is currently generating about -0.1 per unit of risk. If you would invest 276,500 in Daewoo SBI SPAC on September 12, 2024 and sell it today you would earn a total of 20,000 from holding Daewoo SBI SPAC or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Kumho Ind
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Kumho Ind |
Daewoo SBI and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Kumho Ind
The main advantage of trading using opposite Daewoo SBI and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| Daewoo SBI vs. Korea Information Engineering | Daewoo SBI vs. LG Chemicals | Daewoo SBI vs. SK Chemicals Co | Daewoo SBI vs. Daesung Hi Tech Co |
| Kumho Ind vs. Fine Besteel Co | Kumho Ind vs. Hankuk Steel Wire | Kumho Ind vs. Koh Young Technology | Kumho Ind vs. HB Technology TD |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |