Correlation Between KT and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both KT 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 KT and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Corporation and SK Bioscience Co, you can compare the effects of market volatilities on KT 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 KT with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT and SK Bioscience.
Diversification Opportunities for KT and SK Bioscience
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KT and 302440 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding KT Corp. and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and KT 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 KT Corporation 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 KT i.e., KT and SK Bioscience go up and down completely randomly.
Pair Corralation between KT and SK Bioscience
Assuming the 90 days trading horizon KT Corporation is expected to generate 0.58 times more return on investment than SK Bioscience. However, KT Corporation is 1.73 times less risky than SK Bioscience. It trades about 0.09 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.03 per unit of risk. If you would invest 2,666,764 in KT Corporation on December 6, 2024 and sell it today you would earn a total of 2,183,236 from holding KT Corporation or generate 81.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
KT Corp. vs. SK Bioscience Co
Performance |
| Timeline |
| KT Corporation |
| SK Bioscience |
KT and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT and SK Bioscience
The main advantage of trading using opposite KT and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT 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.| KT vs. Hyunwoo Industrial Co | KT vs. Wave Electronics Co | KT vs. Samji Electronics Co | KT vs. Songwon Industrial Co |
| SK Bioscience vs. Ssangyong Information Communication | SK Bioscience vs. Sam Yang Foods | SK Bioscience vs. Digital Power Communications | SK Bioscience vs. BIT Computer 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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