Correlation Between Daewoo SBI and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Eagon 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 Eagon 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 Eagon Industrial Co, you can compare the effects of market volatilities on Daewoo SBI and Eagon 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 Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Eagon Industrial.
Diversification Opportunities for Daewoo SBI and Eagon Industrial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daewoo and Eagon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon 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 Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Eagon Industrial go up and down completely randomly.
Pair Corralation between Daewoo SBI and Eagon Industrial
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Eagon Industrial. In addition to that, Daewoo SBI is 2.58 times more volatile than Eagon Industrial Co. It trades about -0.26 of its total potential returns per unit of risk. Eagon Industrial Co is currently generating about -0.09 per unit of volatility. If you would invest 501,000 in Eagon Industrial Co on August 29, 2024 and sell it today you would lose (7,500) from holding Eagon Industrial Co or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Eagon Industrial Co
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Eagon Industrial |
Daewoo SBI and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Eagon Industrial
The main advantage of trading using opposite Daewoo SBI and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Eagon 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Daewoo SBI vs. CU Medical Systems | Daewoo SBI vs. Sejong Telecom | Daewoo SBI vs. Digital Power Communications | Daewoo SBI vs. Lotte Non Life Insurance |
| Eagon Industrial vs. AptaBio Therapeutics | Eagon Industrial vs. Daewoo SBI SPAC | Eagon Industrial vs. Dream Security co | Eagon Industrial vs. Microfriend |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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