Correlation Between Kukdong Oil and SCI Information
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and SCI Information 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 Kukdong Oil and SCI Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and SCI Information Service, you can compare the effects of market volatilities on Kukdong Oil and SCI Information 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 Kukdong Oil with a short position of SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and SCI Information.
Diversification Opportunities for Kukdong Oil and SCI Information
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukdong and SCI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and SCI Information go up and down completely randomly.
Pair Corralation between Kukdong Oil and SCI Information
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to generate 0.78 times more return on investment than SCI Information. However, Kukdong Oil Chemicals is 1.28 times less risky than SCI Information. It trades about -0.03 of its potential returns per unit of risk. SCI Information Service is currently generating about -0.07 per unit of risk. If you would invest 411,391 in Kukdong Oil Chemicals on November 9, 2024 and sell it today you would lose (62,891) from holding Kukdong Oil Chemicals or give up 15.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. SCI Information Service
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| SCI Information Service |
Kukdong Oil and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and SCI Information
The main advantage of trading using opposite Kukdong Oil and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
| SCI Information vs. Busan Industrial Co | SCI Information vs. Busan Ind | SCI Information vs. Mirae Asset Daewoo | SCI Information vs. Shinhan WTI Futures |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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