Correlation Between SK Holdings and Alton Sports
Can any of the company-specific risk be diversified away by investing in both SK Holdings and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on SK Holdings and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and Alton Sports.
Diversification Opportunities for SK Holdings and Alton Sports
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 034730 and Alton is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of SK Holdings i.e., SK Holdings and Alton Sports go up and down completely randomly.
Pair Corralation between SK Holdings and Alton Sports
Assuming the 90 days trading horizon SK Holdings Co is expected to generate 1.13 times more return on investment than Alton Sports. However, SK Holdings is 1.13 times more volatile than Alton Sports CoLtd. It trades about -0.01 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.05 per unit of risk. If you would invest 15,160,000 in SK Holdings Co on October 29, 2024 and sell it today you would lose (310,000) from holding SK Holdings Co or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Holdings Co vs. Alton Sports CoLtd
Performance |
| Timeline |
| SK Holdings |
| Alton Sports CoLtd |
SK Holdings and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Holdings and Alton Sports
The main advantage of trading using opposite SK Holdings and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Holdings position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| SK Holdings vs. Hanjin Transportation Co | SK Holdings vs. Coloray International Investment | SK Holdings vs. TS Investment Corp | SK Holdings vs. Golden Bridge Investment |
| Alton Sports vs. Samsung Electronics Co | Alton Sports vs. Samsung Electronics Co | Alton Sports vs. KB Financial Group | Alton Sports vs. Shinhan Financial Group |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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