Correlation Between SCI Information and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both SCI Information and Kukdong Oil 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 SCI Information and Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and Kukdong Oil Chemicals, you can compare the effects of market volatilities on SCI Information and Kukdong Oil 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 SCI Information with a short position of Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Kukdong Oil.
Diversification Opportunities for SCI Information and Kukdong Oil
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCI and Kukdong is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals and SCI Information 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 SCI Information Service are associated (or correlated) with Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of SCI Information i.e., SCI Information and Kukdong Oil go up and down completely randomly.
Pair Corralation between SCI Information and Kukdong Oil
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Kukdong Oil. In addition to that, SCI Information is 3.43 times more volatile than Kukdong Oil Chemicals. It trades about -0.13 of its total potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.09 per unit of volatility. If you would invest 351,500 in Kukdong Oil Chemicals on November 8, 2024 and sell it today you would lose (3,000) from holding Kukdong Oil Chemicals or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| SCI Information Service |
| Kukdong Oil Chemicals |
SCI Information and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Kukdong Oil
The main advantage of trading using opposite SCI Information and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| SCI Information vs. Heungkuk Metaltech CoLtd | SCI Information vs. Dongil Metal Co | SCI Information vs. Daejung Chemicals Metals | SCI Information vs. Miwon Chemical |
| Kukdong Oil vs. Automobile Pc | Kukdong Oil vs. Dongil Metal Co | Kukdong Oil vs. Industrial Bank | Kukdong Oil vs. Sejong Industrial |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |