Correlation Between Daewoo SBI and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Kumho Industrial 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 Industrial 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 Industrial Co, you can compare the effects of market volatilities on Daewoo SBI and Kumho Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Kumho Industrial.
Diversification Opportunities for Daewoo SBI and Kumho Industrial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewoo and Kumho is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Kumho Industrial go up and down completely randomly.
Pair Corralation between Daewoo SBI and Kumho Industrial
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 1.78 times more return on investment than Kumho Industrial. However, Daewoo SBI is 1.78 times more volatile than Kumho Industrial Co. It trades about -0.19 of its potential returns per unit of risk. Kumho Industrial Co is currently generating about -0.45 per unit of risk. If you would invest 290,000 in Daewoo SBI SPAC on November 4, 2024 and sell it today you would lose (18,500) from holding Daewoo SBI SPAC or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Kumho Industrial Co
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Kumho Industrial |
Daewoo SBI and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Kumho Industrial
The main advantage of trading using opposite Daewoo SBI and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Kumho Industrial 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 Industrial will offset losses from the drop in Kumho Industrial'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 |
| Kumho Industrial vs. TS Investment Corp | Kumho Industrial vs. SBI Investment KOREA | Kumho Industrial vs. Sam Yang Foods | Kumho Industrial vs. Stic Investments |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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