Correlation Between SK Holdings and MS Autotech
Can any of the company-specific risk be diversified away by investing in both SK Holdings and MS Autotech 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 MS Autotech 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 MS Autotech CoLtd, you can compare the effects of market volatilities on SK Holdings and MS Autotech 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 MS Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and MS Autotech.
Diversification Opportunities for SK Holdings and MS Autotech
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 034730 and 123040 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and MS Autotech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MS Autotech CoLtd 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 MS Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MS Autotech CoLtd has no effect on the direction of SK Holdings i.e., SK Holdings and MS Autotech go up and down completely randomly.
Pair Corralation between SK Holdings and MS Autotech
Assuming the 90 days trading horizon SK Holdings Co is expected to generate 0.69 times more return on investment than MS Autotech. However, SK Holdings Co is 1.44 times less risky than MS Autotech. It trades about 0.07 of its potential returns per unit of risk. MS Autotech CoLtd is currently generating about -0.08 per unit of risk. If you would invest 12,987,000 in SK Holdings Co on November 3, 2024 and sell it today you would earn a total of 1,823,000 from holding SK Holdings Co or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Holdings Co vs. MS Autotech CoLtd
Performance |
| Timeline |
| SK Holdings |
| MS Autotech CoLtd |
SK Holdings and MS Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Holdings and MS Autotech
The main advantage of trading using opposite SK Holdings and MS Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Holdings position performs unexpectedly, MS Autotech 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 MS Autotech will offset losses from the drop in MS Autotech's long position.| SK Holdings vs. Clean Science co | SK Holdings vs. LG Display Co | SK Holdings vs. Korea Computer | SK Holdings vs. Shinsegae Engineering Construction |
| MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Hyundai Motor Co | MS Autotech vs. Hyundai Motor |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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