Correlation Between Daewoo SBI and Korea Gas
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Korea Gas 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 Gas 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 Gas, you can compare the effects of market volatilities on Daewoo SBI and Korea Gas 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 Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Korea Gas.
Diversification Opportunities for Daewoo SBI and Korea Gas
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewoo and Korea is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Korea Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Gas 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 Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Gas has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Korea Gas go up and down completely randomly.
Pair Corralation between Daewoo SBI and Korea Gas
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Korea Gas. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo SBI SPAC is 2.14 times less risky than Korea Gas. The stock trades about -0.52 of its potential returns per unit of risk. The Korea Gas is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 3,570,000 in Korea Gas on November 18, 2024 and sell it today you would lose (410,000) from holding Korea Gas or give up 11.48% 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. Korea Gas
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Korea Gas |
Daewoo SBI and Korea Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Korea Gas
The main advantage of trading using opposite Daewoo SBI and Korea Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Korea Gas 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 Gas will offset losses from the drop in Korea Gas' long position.| Daewoo SBI vs. Korea Alcohol Industrial | Daewoo SBI vs. Anam Electronics Co | Daewoo SBI vs. Jahwa Electronics Co | Daewoo SBI vs. Wave Electronics Co |
| Korea Gas vs. Hanjoo Light Metal | Korea Gas vs. PJ Metal Co | Korea Gas vs. Samick Musical Instruments | Korea Gas vs. Daishin Information Communications |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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