Correlation Between SBI Investment and FLITTO

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SBI Investment and FLITTO 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 SBI Investment and FLITTO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and FLITTO Inc, you can compare the effects of market volatilities on SBI Investment and FLITTO 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 SBI Investment with a short position of FLITTO. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and FLITTO.

Diversification Opportunities for SBI Investment and FLITTO

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between SBI and FLITTO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and FLITTO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLITTO Inc and SBI Investment 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 SBI Investment KOREA are associated (or correlated) with FLITTO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLITTO Inc has no effect on the direction of SBI Investment i.e., SBI Investment and FLITTO go up and down completely randomly.

Pair Corralation between SBI Investment and FLITTO

Assuming the 90 days trading horizon SBI Investment is expected to generate 1.12 times less return on investment than FLITTO. But when comparing it to its historical volatility, SBI Investment KOREA is 1.65 times less risky than FLITTO. It trades about 0.09 of its potential returns per unit of risk. FLITTO Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,591,000  in FLITTO Inc on September 6, 2024 and sell it today you would earn a total of  196,000  from holding FLITTO Inc or generate 12.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

SBI Investment KOREA  vs.  FLITTO Inc

 Performance 
       Timeline  
SBI Investment KOREA 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SBI Investment KOREA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SBI Investment sustained solid returns over the last few months and may actually be approaching a breakup point.
FLITTO Inc 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in FLITTO Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FLITTO sustained solid returns over the last few months and may actually be approaching a breakup point.

SBI Investment and FLITTO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SBI Investment and FLITTO

The main advantage of trading using opposite SBI Investment and FLITTO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, FLITTO 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 FLITTO will offset losses from the drop in FLITTO's long position.
The idea behind SBI Investment KOREA and FLITTO Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments