Correlation Between Korea Aerospace and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both Korea Aerospace and SK Bioscience 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 Aerospace and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Aerospace Industries and SK Bioscience Co, you can compare the effects of market volatilities on Korea Aerospace and SK Bioscience 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 Aerospace with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Aerospace and SK Bioscience.
Diversification Opportunities for Korea Aerospace and SK Bioscience
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and 302440 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Korea Aerospace Industries and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and Korea Aerospace 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 Aerospace Industries are associated (or correlated) with SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of Korea Aerospace i.e., Korea Aerospace and SK Bioscience go up and down completely randomly.
Pair Corralation between Korea Aerospace and SK Bioscience
Assuming the 90 days trading horizon Korea Aerospace Industries is expected to generate 1.75 times more return on investment than SK Bioscience. However, Korea Aerospace is 1.75 times more volatile than SK Bioscience Co. It trades about 0.2 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.18 per unit of risk. If you would invest 5,790,977 in Korea Aerospace Industries on January 20, 2025 and sell it today you would earn a total of 2,249,023 from holding Korea Aerospace Industries or generate 38.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Aerospace Industries vs. SK Bioscience Co
Performance |
| Timeline |
| Korea Aerospace Indu |
| SK Bioscience |
Korea Aerospace and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Aerospace and SK Bioscience
The main advantage of trading using opposite Korea Aerospace and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Aerospace position performs unexpectedly, SK Bioscience 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 Bioscience will offset losses from the drop in SK Bioscience's long position.| Korea Aerospace vs. Korea Information Communications | Korea Aerospace vs. Lotte Chilsung Beverage | Korea Aerospace vs. YeaRimDang Publishing Co | Korea Aerospace vs. Dongbang Transport Logistics |
| SK Bioscience vs. Korean Reinsurance Co | SK Bioscience vs. SK Telecom Co | SK Bioscience vs. ECSTELECOM Co | SK Bioscience vs. InfoBank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |