Correlation Between Ssangyong Information and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and SK Bioscience 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 Ssangyong Information and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Information Communication and SK Bioscience Co, you can compare the effects of market volatilities on Ssangyong Information and SK Bioscience 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 Ssangyong Information with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and SK Bioscience.
Diversification Opportunities for Ssangyong Information and SK Bioscience
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ssangyong and 302440 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and Ssangyong Information 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 Ssangyong Information Communication are associated (or correlated) with SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and SK Bioscience go up and down completely randomly.
Pair Corralation between Ssangyong Information and SK Bioscience
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate about the same return on investment as SK Bioscience Co. But, Ssangyong Information Communication is 1.33 times less risky than SK Bioscience. It trades about -0.07 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.05 per unit of risk. If you would invest 8,310,000 in SK Bioscience Co on August 26, 2024 and sell it today you would lose (3,525,000) from holding SK Bioscience Co or give up 42.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. SK Bioscience Co
Performance |
| Timeline |
| Ssangyong Information |
| SK Bioscience |
Ssangyong Information and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and SK Bioscience
The main advantage of trading using opposite Ssangyong Information and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, SK Bioscience 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 Bioscience will offset losses from the drop in SK Bioscience's long position.| Ssangyong Information vs. Dongil Metal Co | Ssangyong Information vs. Sam Yang Foods | Ssangyong Information vs. Samlip General Foods | Ssangyong Information vs. Korea Information Communications |
| SK Bioscience vs. Lotte Chilsung Beverage | SK Bioscience vs. LG Household Healthcare | SK Bioscience vs. Ssangyong Information Communication | SK Bioscience vs. Nice Information Telecommunication |
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.
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