Correlation Between SK Holdings and Aju IB
Can any of the company-specific risk be diversified away by investing in both SK Holdings and Aju IB 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 SK Holdings and Aju IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Holdings Co and Aju IB Investment, you can compare the effects of market volatilities on SK Holdings and Aju IB 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 SK Holdings with a short position of Aju IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and Aju IB.
Diversification Opportunities for SK Holdings and Aju IB
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 034730 and Aju is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and Aju IB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aju IB Investment and SK Holdings 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 SK Holdings Co are associated (or correlated) with Aju IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aju IB Investment has no effect on the direction of SK Holdings i.e., SK Holdings and Aju IB go up and down completely randomly.
Pair Corralation between SK Holdings and Aju IB
Assuming the 90 days trading horizon SK Holdings Co is expected to under-perform the Aju IB. But the stock apears to be less risky and, when comparing its historical volatility, SK Holdings Co is 4.99 times less risky than Aju IB. The stock trades about -0.22 of its potential returns per unit of risk. The Aju IB Investment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 206,500 in Aju IB Investment on September 4, 2024 and sell it today you would earn a total of 76,500 from holding Aju IB Investment or generate 37.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Holdings Co vs. Aju IB Investment
Performance |
| Timeline |
| SK Holdings |
| Aju IB Investment |
SK Holdings and Aju IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Holdings and Aju IB
The main advantage of trading using opposite SK Holdings and Aju IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Holdings position performs unexpectedly, Aju IB 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 Aju IB will offset losses from the drop in Aju IB's long position.| SK Holdings vs. LG Display | SK Holdings vs. Hyundai Motor | SK Holdings vs. Hyundai Motor Co | SK Holdings vs. Hyundai Motor Co |
| Aju IB vs. Atinum Investment Co | Aju IB vs. SBI Investment KOREA | Aju IB vs. Busan Industrial Co | Aju IB 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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