Correlation Between Dongbang Transport and Sk Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Sk Biopharmaceutica 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 Dongbang Transport and Sk Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Sk Biopharmaceuticals Co, you can compare the effects of market volatilities on Dongbang Transport and Sk Biopharmaceutica 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 Dongbang Transport with a short position of Sk Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Sk Biopharmaceutica.
Diversification Opportunities for Dongbang Transport and Sk Biopharmaceutica
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbang and 326030 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Sk Biopharmaceuticals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sk Biopharmaceuticals and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with Sk Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sk Biopharmaceuticals has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Sk Biopharmaceutica go up and down completely randomly.
Pair Corralation between Dongbang Transport and Sk Biopharmaceutica
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.48 times more return on investment than Sk Biopharmaceutica. However, Dongbang Transport Logistics is 2.06 times less risky than Sk Biopharmaceutica. It trades about 0.24 of its potential returns per unit of risk. Sk Biopharmaceuticals Co is currently generating about 0.1 per unit of risk. If you would invest 216,500 in Dongbang Transport Logistics on October 25, 2024 and sell it today you would earn a total of 12,000 from holding Dongbang Transport Logistics or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Sk Biopharmaceuticals Co
Performance |
| Timeline |
| Dongbang Transport |
| Sk Biopharmaceuticals |
Dongbang Transport and Sk Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Sk Biopharmaceutica
The main advantage of trading using opposite Dongbang Transport and Sk Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Sk Biopharmaceutica 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 Biopharmaceutica will offset losses from the drop in Sk Biopharmaceutica's long position.| Dongbang Transport vs. KB Financial Group | Dongbang Transport vs. Shinhan Financial Group | Dongbang Transport vs. Hana Financial | Dongbang Transport vs. Woori Financial Group |
| Sk Biopharmaceutica vs. Ssangyong Materials Corp | Sk Biopharmaceutica vs. Daejung Chemicals Metals | Sk Biopharmaceutica vs. Hana Materials | Sk Biopharmaceutica vs. PI Advanced Materials |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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