Correlation Between Kia Corp and SK Holdings
Can any of the company-specific risk be diversified away by investing in both Kia Corp and SK Holdings 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 Kia Corp and SK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and SK Holdings Co, you can compare the effects of market volatilities on Kia Corp and SK Holdings 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 Kia Corp with a short position of SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and SK Holdings.
Diversification Opportunities for Kia Corp and SK Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kia and 034730 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings and Kia Corp 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 Kia Corp are associated (or correlated) with SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of Kia Corp i.e., Kia Corp and SK Holdings go up and down completely randomly.
Pair Corralation between Kia Corp and SK Holdings
Assuming the 90 days trading horizon Kia Corp is expected to under-perform the SK Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Kia Corp is 1.02 times less risky than SK Holdings. The stock trades about -0.21 of its potential returns per unit of risk. The SK Holdings Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14,810,000 in SK Holdings Co on November 27, 2024 and sell it today you would earn a total of 50,000 from holding SK Holdings Co or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. SK Holdings Co
Performance |
| Timeline |
| Kia Corp |
| SK Holdings |
Kia Corp and SK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and SK Holdings
The main advantage of trading using opposite Kia Corp and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, SK Holdings 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 SK Holdings will offset losses from the drop in SK Holdings' long position.| Kia Corp vs. Formetal Co | Kia Corp vs. Dongil Metal Co | Kia Corp vs. Dongwoon Anatech Co | Kia Corp vs. Seoyon Topmetal Co |
| SK Holdings vs. Duksan Hi Metal | SK Holdings vs. iNtRON Biotechnology | SK Holdings vs. Mgame Corp | SK Holdings vs. Cheryong Industrial CoLtd |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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