Correlation Between People Technology and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both People Technology 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 People Technology and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and SK Bioscience Co, you can compare the effects of market volatilities on People Technology 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 People Technology with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and SK Bioscience.
Diversification Opportunities for People Technology and SK Bioscience
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between People and 302440 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding People Technology and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and People Technology 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 People Technology 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 People Technology i.e., People Technology and SK Bioscience go up and down completely randomly.
Pair Corralation between People Technology and SK Bioscience
Assuming the 90 days trading horizon People Technology is expected to under-perform the SK Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, People Technology is 1.51 times less risky than SK Bioscience. The stock trades about -0.08 of its potential returns per unit of risk. The SK Bioscience Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,620,000 in SK Bioscience Co on September 14, 2024 and sell it today you would earn a total of 1,110,000 from holding SK Bioscience Co or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
People Technology vs. SK Bioscience Co
Performance |
| Timeline |
| People Technology |
| SK Bioscience |
People Technology and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and SK Bioscience
The main advantage of trading using opposite People Technology and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology 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.| People Technology vs. Korea New Network | People Technology vs. Solution Advanced Technology | People Technology vs. Busan Industrial Co | People Technology vs. Busan Ind |
| SK Bioscience vs. Ilji Technology Co | SK Bioscience vs. Woori Technology Investment | SK Bioscience vs. People Technology | SK Bioscience vs. NH Investment Securities |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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