Correlation Between Haesung Industrial and SK Holdings
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and SK Holdings 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 Haesung Industrial and SK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and SK Holdings Co, you can compare the effects of market volatilities on Haesung Industrial and SK Holdings 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 Haesung Industrial with a short position of SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and SK Holdings.
Diversification Opportunities for Haesung Industrial and SK Holdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haesung and 034730 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings and Haesung Industrial 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 Haesung Industrial Co are associated (or correlated) with SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and SK Holdings go up and down completely randomly.
Pair Corralation between Haesung Industrial and SK Holdings
Assuming the 90 days trading horizon Haesung Industrial Co is expected to under-perform the SK Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Haesung Industrial Co is 1.5 times less risky than SK Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The SK Holdings Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 16,310,400 in SK Holdings Co on September 3, 2024 and sell it today you would lose (2,650,400) from holding SK Holdings Co or give up 16.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. SK Holdings Co
Performance |
| Timeline |
| Haesung Industrial |
| SK Holdings |
Haesung Industrial and SK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and SK Holdings
The main advantage of trading using opposite Haesung Industrial and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, SK Holdings 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 Holdings will offset losses from the drop in SK Holdings' long position.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. UNISEM Co | Haesung Industrial vs. RPBio Inc | Haesung Industrial vs. Finebesteel |
| SK Holdings vs. Okins Electronics Co | SK Holdings vs. LG Electronics Pfd | SK Holdings vs. Samyoung Electronics Co | SK Holdings vs. Sunny Electronics Corp |
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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