Correlation Between Kbi Metal and Sk Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and Sk Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Sk Biopharmaceuticals Co, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of Sk Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Sk Biopharmaceutica.
Diversification Opportunities for Kbi Metal and Sk Biopharmaceutica
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kbi and 326030 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Sk Biopharmaceuticals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sk Biopharmaceuticals and Kbi Metal 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 Kbi Metal Co 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 Kbi Metal i.e., Kbi Metal and Sk Biopharmaceutica go up and down completely randomly.
Pair Corralation between Kbi Metal and Sk Biopharmaceutica
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Sk Biopharmaceutica. In addition to that, Kbi Metal is 1.05 times more volatile than Sk Biopharmaceuticals Co. It trades about -0.32 of its total potential returns per unit of risk. Sk Biopharmaceuticals Co is currently generating about -0.29 per unit of volatility. If you would invest 11,970,000 in Sk Biopharmaceuticals Co on August 28, 2024 and sell it today you would lose (2,200,000) from holding Sk Biopharmaceuticals Co or give up 18.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Sk Biopharmaceuticals Co
Performance |
| Timeline |
| Kbi Metal |
| Sk Biopharmaceuticals |
Kbi Metal and Sk Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Sk Biopharmaceutica
The main advantage of trading using opposite Kbi Metal and Sk Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind | Kbi Metal vs. Mirae Asset Daewoo | Kbi Metal vs. UNISEM 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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