Correlation Between Industrial Bank and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and SK Chemicals 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 Industrial Bank and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and SK Chemicals Co, you can compare the effects of market volatilities on Industrial Bank and SK Chemicals 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 Industrial Bank with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and SK Chemicals.
Diversification Opportunities for Industrial Bank and SK Chemicals
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and 285130 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Industrial Bank 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 Industrial Bank are associated (or correlated) with SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Industrial Bank i.e., Industrial Bank and SK Chemicals go up and down completely randomly.
Pair Corralation between Industrial Bank and SK Chemicals
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.71 times more return on investment than SK Chemicals. However, Industrial Bank is 1.4 times less risky than SK Chemicals. It trades about 0.1 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.06 per unit of risk. If you would invest 1,080,957 in Industrial Bank on September 1, 2024 and sell it today you would earn a total of 407,043 from holding Industrial Bank or generate 37.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. SK Chemicals Co
Performance |
| Timeline |
| Industrial Bank |
| SK Chemicals |
Industrial Bank and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and SK Chemicals
The main advantage of trading using opposite Industrial Bank and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, SK Chemicals 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 Chemicals will offset losses from the drop in SK Chemicals' long position.| Industrial Bank vs. Samsung Electronics Co | Industrial Bank vs. Samsung Electronics Co | Industrial Bank vs. KB Financial Group | Industrial Bank vs. Shinhan Financial Group |
| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Hanwha Solutions | SK Chemicals vs. Hyundai Steel |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |