Correlation Between Korea Gas and SK Holdings
Can any of the company-specific risk be diversified away by investing in both Korea Gas 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 Korea Gas and SK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Gas and SK Holdings Co, you can compare the effects of market volatilities on Korea Gas 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 Korea Gas with a short position of SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Gas and SK Holdings.
Diversification Opportunities for Korea Gas and SK Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and 034730 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Korea Gas and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings and Korea Gas 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 Korea Gas 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 Korea Gas i.e., Korea Gas and SK Holdings go up and down completely randomly.
Pair Corralation between Korea Gas and SK Holdings
Assuming the 90 days trading horizon Korea Gas is expected to generate 1.04 times more return on investment than SK Holdings. However, Korea Gas is 1.04 times more volatile than SK Holdings Co. It trades about 0.23 of its potential returns per unit of risk. SK Holdings Co is currently generating about 0.1 per unit of risk. If you would invest 3,265,000 in Korea Gas on October 14, 2024 and sell it today you would earn a total of 325,000 from holding Korea Gas or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Gas vs. SK Holdings Co
Performance |
| Timeline |
| Korea Gas |
| SK Holdings |
Korea Gas and SK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Gas and SK Holdings
The main advantage of trading using opposite Korea Gas and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Gas 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.| Korea Gas vs. Dongbang Transport Logistics | Korea Gas vs. KG Eco Technology | Korea Gas vs. Mgame Corp | Korea Gas vs. Eugene Technology CoLtd |
| SK Holdings vs. Dongbang Transport Logistics | SK Holdings vs. Camus Engineering Construction | SK Holdings vs. Dongwoo Farm To | SK Holdings vs. Nam Hwa Construction |
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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