Correlation Between Daewoo SBI and Kepco Plant
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Kepco Plant 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 Kepco Plant 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 Kepco Plant S, you can compare the effects of market volatilities on Daewoo SBI and Kepco Plant 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 Kepco Plant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Kepco Plant.
Diversification Opportunities for Daewoo SBI and Kepco Plant
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daewoo and Kepco is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Kepco Plant S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kepco Plant S 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 Kepco Plant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kepco Plant S has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Kepco Plant go up and down completely randomly.
Pair Corralation between Daewoo SBI and Kepco Plant
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Kepco Plant. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo SBI SPAC is 1.07 times less risky than Kepco Plant. The stock trades about -0.15 of its potential returns per unit of risk. The Kepco Plant S is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,520,000 in Kepco Plant S on September 3, 2024 and sell it today you would earn a total of 1,165,000 from holding Kepco Plant S or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Kepco Plant S
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Kepco Plant S |
Daewoo SBI and Kepco Plant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Kepco Plant
The main advantage of trading using opposite Daewoo SBI and Kepco Plant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Kepco Plant 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 Kepco Plant will offset losses from the drop in Kepco Plant'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 |
| Kepco Plant vs. CG Hi Tech | Kepco Plant vs. PLAYWITH | Kepco Plant vs. Lotte Data Communication | Kepco Plant vs. DB Insurance 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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