Correlation Between Hannong Chemicals and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals 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 Hannong Chemicals and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and SK Bioscience Co, you can compare the effects of market volatilities on Hannong Chemicals 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 Hannong Chemicals with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and SK Bioscience.
Diversification Opportunities for Hannong Chemicals and SK Bioscience
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hannong and 302440 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals i.e., Hannong Chemicals and SK Bioscience go up and down completely randomly.
Pair Corralation between Hannong Chemicals and SK Bioscience
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 1.15 times more return on investment than SK Bioscience. However, Hannong Chemicals is 1.15 times more volatile than SK Bioscience Co. It trades about 0.2 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.13 per unit of risk. If you would invest 1,367,558 in Hannong Chemicals on October 22, 2024 and sell it today you would earn a total of 127,442 from holding Hannong Chemicals or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. SK Bioscience Co
Performance |
| Timeline |
| Hannong Chemicals |
| SK Bioscience |
Hannong Chemicals and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and SK Bioscience
The main advantage of trading using opposite Hannong Chemicals and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals 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.| Hannong Chemicals vs. Eagon Industrial Co | Hannong Chemicals vs. Daiyang Metal Co | Hannong Chemicals vs. Duksan Hi Metal | Hannong Chemicals vs. Industrial Bank |
| SK Bioscience vs. Korea Industrial Co | SK Bioscience vs. Samyang Foods Co | SK Bioscience vs. Songwon Industrial Co | SK Bioscience vs. Hyunwoo Industrial Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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