Correlation Between Korea Computer and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Korea Computer and SK Chemicals 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 Computer and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and SK Chemicals Co, you can compare the effects of market volatilities on Korea Computer and SK Chemicals 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 Computer with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and SK Chemicals.
Diversification Opportunities for Korea Computer and SK Chemicals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and 285130 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Korea Computer 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 Computer are associated (or correlated) with SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Korea Computer i.e., Korea Computer and SK Chemicals go up and down completely randomly.
Pair Corralation between Korea Computer and SK Chemicals
Assuming the 90 days trading horizon Korea Computer is expected to generate 1.49 times more return on investment than SK Chemicals. However, Korea Computer is 1.49 times more volatile than SK Chemicals Co. It trades about 0.03 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.05 per unit of risk. If you would invest 418,105 in Korea Computer on November 27, 2024 and sell it today you would earn a total of 72,895 from holding Korea Computer or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. SK Chemicals Co
Performance |
| Timeline |
| Korea Computer |
| SK Chemicals |
Korea Computer and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and SK Chemicals
The main advantage of trading using opposite Korea Computer and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, SK Chemicals 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 Chemicals will offset losses from the drop in SK Chemicals' long position.| Korea Computer vs. Miwon Chemicals Co | Korea Computer vs. Lotte Rental Co | Korea Computer vs. SK Chemicals Co | Korea Computer vs. ENERGYMACHINERY KOREA CoLtd |
| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Hanwha Solutions | SK Chemicals vs. Lotte Chemical 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |