Correlation Between Daewoo SBI and KPX Green
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and KPX Green 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 KPX Green 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 KPX Green Chemical, you can compare the effects of market volatilities on Daewoo SBI and KPX Green 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 KPX Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and KPX Green.
Diversification Opportunities for Daewoo SBI and KPX Green
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daewoo and KPX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and KPX Green Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Green Chemical 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 KPX Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Green Chemical has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and KPX Green go up and down completely randomly.
Pair Corralation between Daewoo SBI and KPX Green
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 0.52 times more return on investment than KPX Green. However, Daewoo SBI SPAC is 1.91 times less risky than KPX Green. It trades about 0.01 of its potential returns per unit of risk. KPX Green Chemical is currently generating about -0.04 per unit of risk. If you would invest 273,500 in Daewoo SBI SPAC on October 29, 2024 and sell it today you would lose (500.00) from holding Daewoo SBI SPAC or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. KPX Green Chemical
Performance |
| Timeline |
| Daewoo SBI SPAC |
| KPX Green Chemical |
Daewoo SBI and KPX Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and KPX Green
The main advantage of trading using opposite Daewoo SBI and KPX Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, KPX Green 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 KPX Green will offset losses from the drop in KPX Green's long position.| Daewoo SBI vs. Daishin Information Communications | Daewoo SBI vs. Sewoon Medical Co | Daewoo SBI vs. Digital Power Communications | Daewoo SBI vs. Taegu Broadcasting |
| KPX Green vs. Seoul Semiconductor Co | KPX Green vs. Nice Information Telecommunication | KPX Green vs. ITM Semiconductor Co | KPX Green vs. Ssangyong Information Communication |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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