Correlation Between Daewoo SBI and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Korea Electronic 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 Electronic 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 Electronic Certification, you can compare the effects of market volatilities on Daewoo SBI and Korea Electronic 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 Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Korea Electronic.
Diversification Opportunities for Daewoo SBI and Korea Electronic
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daewoo and Korea is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Korea Electronic go up and down completely randomly.
Pair Corralation between Daewoo SBI and Korea Electronic
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 0.95 times more return on investment than Korea Electronic. However, Daewoo SBI SPAC is 1.05 times less risky than Korea Electronic. It trades about -0.05 of its potential returns per unit of risk. Korea Electronic Certification is currently generating about -0.16 per unit of risk. If you would invest 276,500 in Daewoo SBI SPAC on September 12, 2024 and sell it today you would lose (17,500) from holding Daewoo SBI SPAC or give up 6.33% 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. Korea Electronic Certification
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Korea Electronic Cer |
Daewoo SBI and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Korea Electronic
The main advantage of trading using opposite Daewoo SBI and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Korea Electronic 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 Electronic will offset losses from the drop in Korea Electronic's long position.| Daewoo SBI vs. Coloray International Investment | Daewoo SBI vs. Mobile Appliance | Daewoo SBI vs. Sangsangin Investment Securities | Daewoo SBI vs. Samyung Trading Co |
| Korea Electronic vs. Korea New Network | Korea Electronic vs. Solution Advanced Technology | Korea Electronic vs. Busan Industrial Co | Korea Electronic vs. Busan Ind |
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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