Correlation Between Okins Electronics and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Okins Electronics 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 Okins Electronics and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okins Electronics Co and SK Chemicals Co, you can compare the effects of market volatilities on Okins Electronics 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 Okins Electronics with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okins Electronics and SK Chemicals.
Diversification Opportunities for Okins Electronics and SK Chemicals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Okins and 28513K is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Okins Electronics Co and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Okins Electronics 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 Okins Electronics Co 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 Okins Electronics i.e., Okins Electronics and SK Chemicals go up and down completely randomly.
Pair Corralation between Okins Electronics and SK Chemicals
Assuming the 90 days trading horizon Okins Electronics Co is expected to generate 1.76 times more return on investment than SK Chemicals. However, Okins Electronics is 1.76 times more volatile than SK Chemicals Co. It trades about 0.37 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.16 per unit of risk. If you would invest 457,000 in Okins Electronics Co on October 24, 2024 and sell it today you would earn a total of 103,000 from holding Okins Electronics Co or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okins Electronics Co vs. SK Chemicals Co
Performance |
| Timeline |
| Okins Electronics |
| SK Chemicals |
Okins Electronics and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okins Electronics and SK Chemicals
The main advantage of trading using opposite Okins Electronics and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okins Electronics 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.| Okins Electronics vs. Daishin Balance No8 | Okins Electronics vs. NAU IB Capital | Okins Electronics vs. Daishin Balance No | Okins Electronics vs. Daesung Private Equity |
| SK Chemicals vs. Daejoo Electronic Materials | SK Chemicals vs. Okins Electronics Co | SK Chemicals vs. PJ Electronics Co | SK Chemicals vs. Hotel Shilla Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |