Correlation Between Daewoo SBI and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Hyosung Advanced 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 Hyosung Advanced 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 Hyosung Advanced Materials, you can compare the effects of market volatilities on Daewoo SBI and Hyosung Advanced 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 Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Hyosung Advanced.
Diversification Opportunities for Daewoo SBI and Hyosung Advanced
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daewoo and Hyosung is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat 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 Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Hyosung Advanced go up and down completely randomly.
Pair Corralation between Daewoo SBI and Hyosung Advanced
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 0.55 times more return on investment than Hyosung Advanced. However, Daewoo SBI SPAC is 1.81 times less risky than Hyosung Advanced. It trades about -0.26 of its potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.54 per unit of risk. If you would invest 265,000 in Daewoo SBI SPAC on August 29, 2024 and sell it today you would lose (28,000) from holding Daewoo SBI SPAC or give up 10.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Hyosung Advanced Materials
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Hyosung Advanced Mat |
Daewoo SBI and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Hyosung Advanced
The main advantage of trading using opposite Daewoo SBI and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| Daewoo SBI vs. CU Medical Systems | Daewoo SBI vs. Sejong Telecom | Daewoo SBI vs. Digital Power Communications | Daewoo SBI vs. Lotte Non Life Insurance |
| Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Shinhan WTI Futures | Hyosung Advanced vs. Finebesteel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |