Correlation Between Daewoo SBI and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Korea Shipbuilding 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 Korea Shipbuilding 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 Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Daewoo SBI and Korea Shipbuilding 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 Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Korea Shipbuilding.
Diversification Opportunities for Daewoo SBI and Korea Shipbuilding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daewoo and Korea is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding 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 Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Daewoo SBI and Korea Shipbuilding
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Korea Shipbuilding. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo SBI SPAC is 1.84 times less risky than Korea Shipbuilding. The stock trades about -0.17 of its potential returns per unit of risk. The Korea Shipbuilding Offshore is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 13,080,000 in Korea Shipbuilding Offshore on September 3, 2024 and sell it today you would earn a total of 7,370,000 from holding Korea Shipbuilding Offshore or generate 56.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Korea Shipbuilding |
Daewoo SBI and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Korea Shipbuilding
The main advantage of trading using opposite Daewoo SBI and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Daewoo SBI vs. Daejoo Electronic Materials | Daewoo SBI vs. Mgame Corp | Daewoo SBI vs. Kakao Games Corp | Daewoo SBI vs. Iljin Materials Co |
| Korea Shipbuilding vs. LG Display | Korea Shipbuilding vs. Hyundai Motor | Korea Shipbuilding vs. Hyundai Motor Co | Korea Shipbuilding vs. Hyundai Motor Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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