Correlation Between Namyang Dairy and SK IE
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy and SK IE 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 Namyang Dairy and SK IE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and SK IE Technology, you can compare the effects of market volatilities on Namyang Dairy and SK IE 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 Namyang Dairy with a short position of SK IE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and SK IE.
Diversification Opportunities for Namyang Dairy and SK IE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Namyang and 361610 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy and SK IE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK IE Technology and Namyang Dairy 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 Namyang Dairy are associated (or correlated) with SK IE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK IE Technology has no effect on the direction of Namyang Dairy i.e., Namyang Dairy and SK IE go up and down completely randomly.
Pair Corralation between Namyang Dairy and SK IE
Assuming the 90 days trading horizon Namyang Dairy is expected to generate 1.5 times less return on investment than SK IE. But when comparing it to its historical volatility, Namyang Dairy is 1.3 times less risky than SK IE. It trades about 0.23 of its potential returns per unit of risk. SK IE Technology is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,300,000 in SK IE Technology on December 1, 2024 and sell it today you would earn a total of 500,000 from holding SK IE Technology or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namyang Dairy vs. SK IE Technology
Performance |
| Timeline |
| Namyang Dairy |
| SK IE Technology |
Namyang Dairy and SK IE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and SK IE
The main advantage of trading using opposite Namyang Dairy and SK IE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy position performs unexpectedly, SK IE 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 IE will offset losses from the drop in SK IE's long position.| Namyang Dairy vs. KB Financial Group | Namyang Dairy vs. Shinhan Financial Group | Namyang Dairy vs. Hyundai Motor | Namyang Dairy vs. Hyundai Motor Co |
| SK IE vs. Hyundai BNG Steel | SK IE vs. Korea Industrial Co | SK IE vs. Dongil Steel Co | SK IE vs. Industrial Bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |