Correlation Between Digital Power and Sk Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Digital Power 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 Digital Power and Sk Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Sk Biopharmaceuticals Co, you can compare the effects of market volatilities on Digital Power 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 Digital Power with a short position of Sk Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Sk Biopharmaceutica.
Diversification Opportunities for Digital Power and Sk Biopharmaceutica
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digital and 326030 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Sk Biopharmaceuticals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sk Biopharmaceuticals and Digital Power 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 Digital Power Communications 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 Digital Power i.e., Digital Power and Sk Biopharmaceutica go up and down completely randomly.
Pair Corralation between Digital Power and Sk Biopharmaceutica
Assuming the 90 days trading horizon Digital Power is expected to generate 1.1 times less return on investment than Sk Biopharmaceutica. But when comparing it to its historical volatility, Digital Power Communications is 1.13 times less risky than Sk Biopharmaceutica. It trades about 0.05 of its potential returns per unit of risk. Sk Biopharmaceuticals Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,440,000 in Sk Biopharmaceuticals Co on October 14, 2024 and sell it today you would earn a total of 4,070,000 from holding Sk Biopharmaceuticals Co or generate 54.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Sk Biopharmaceuticals Co
Performance |
| Timeline |
| Digital Power Commun |
| Sk Biopharmaceuticals |
Digital Power and Sk Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Sk Biopharmaceutica
The main advantage of trading using opposite Digital Power and Sk Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power 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.| Digital Power vs. Display Tech Co | Digital Power vs. LG Display Co | Digital Power vs. Grand Korea Leisure | Digital Power vs. GS Retail 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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