Correlation Between Daewoo SBI and AeroSpace Technology
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and AeroSpace Technology 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 AeroSpace Technology 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 AeroSpace Technology of, you can compare the effects of market volatilities on Daewoo SBI and AeroSpace Technology 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 AeroSpace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and AeroSpace Technology.
Diversification Opportunities for Daewoo SBI and AeroSpace Technology
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daewoo and AeroSpace is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and AeroSpace Technology of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroSpace Technology 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 AeroSpace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroSpace Technology has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and AeroSpace Technology go up and down completely randomly.
Pair Corralation between Daewoo SBI and AeroSpace Technology
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the AeroSpace Technology. In addition to that, Daewoo SBI is 1.05 times more volatile than AeroSpace Technology of. It trades about -0.28 of its total potential returns per unit of risk. AeroSpace Technology of is currently generating about -0.16 per unit of volatility. If you would invest 53,000 in AeroSpace Technology of on September 3, 2024 and sell it today you would lose (3,200) from holding AeroSpace Technology of or give up 6.04% 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. AeroSpace Technology of
Performance |
| Timeline |
| Daewoo SBI SPAC |
| AeroSpace Technology |
Daewoo SBI and AeroSpace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and AeroSpace Technology
The main advantage of trading using opposite Daewoo SBI and AeroSpace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, AeroSpace Technology 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 AeroSpace Technology will offset losses from the drop in AeroSpace Technology'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 |
| AeroSpace Technology vs. LG Display | AeroSpace Technology vs. Hyundai Motor | AeroSpace Technology vs. Hyundai Motor Co | AeroSpace Technology 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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