Correlation Between Nable Communications and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Nable Communications 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 Nable Communications and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and SK Chemicals Co, you can compare the effects of market volatilities on Nable Communications 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 Nable Communications with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and SK Chemicals.
Diversification Opportunities for Nable Communications and SK Chemicals
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nable and 28513K is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Nable Communications 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 Nable Communications 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 Nable Communications i.e., Nable Communications and SK Chemicals go up and down completely randomly.
Pair Corralation between Nable Communications and SK Chemicals
Assuming the 90 days trading horizon Nable Communications is expected to generate 0.92 times more return on investment than SK Chemicals. However, Nable Communications is 1.09 times less risky than SK Chemicals. It trades about -0.04 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.11 per unit of risk. If you would invest 746,000 in Nable Communications on November 5, 2024 and sell it today you would lose (105,000) from holding Nable Communications or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. SK Chemicals Co
Performance |
| Timeline |
| Nable Communications |
| SK Chemicals |
Nable Communications and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and SK Chemicals
The main advantage of trading using opposite Nable Communications and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications 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.| Nable Communications vs. Dongnam Chemical Co | Nable Communications vs. Kg Chemical | Nable Communications vs. Kukdong Oil Chemicals | Nable Communications vs. Lotte Fine Chemical |
| SK Chemicals vs. Lake Materials Co | SK Chemicals vs. Taegu Broadcasting | SK Chemicals vs. TOPMATERIAL LTD | SK Chemicals vs. Hana Materials |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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