Correlation Between TJ Media and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both TJ Media 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 TJ Media and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TJ media Co and SK Bioscience Co, you can compare the effects of market volatilities on TJ Media 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 TJ Media with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and SK Bioscience.
Diversification Opportunities for TJ Media and SK Bioscience
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 032540 and 302440 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and TJ Media 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 TJ media Co 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 TJ Media i.e., TJ Media and SK Bioscience go up and down completely randomly.
Pair Corralation between TJ Media and SK Bioscience
Assuming the 90 days trading horizon TJ media Co is expected to generate 0.56 times more return on investment than SK Bioscience. However, TJ media Co is 1.77 times less risky than SK Bioscience. It trades about 0.29 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.04 per unit of risk. If you would invest 453,967 in TJ media Co on October 23, 2024 and sell it today you would earn a total of 33,533 from holding TJ media Co or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TJ media Co vs. SK Bioscience Co
Performance |
| Timeline |
| TJ media |
| SK Bioscience |
TJ Media and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TJ Media and SK Bioscience
The main advantage of trading using opposite TJ Media and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media 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.| TJ Media vs. DONGKUK TED METAL | TJ Media vs. BGF Retail Co | TJ Media vs. Digital Power Communications | TJ Media vs. Cuckoo Homesys Co |
| SK Bioscience vs. Samsung Biologics Co | SK Bioscience vs. Sk Biopharmaceuticals Co | SK Bioscience vs. ABL Bio | SK Bioscience vs. Green Cross Lab |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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