Correlation Between SGA Solutions and SK Holdings
Can any of the company-specific risk be diversified away by investing in both SGA Solutions and SK Holdings 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 SGA Solutions and SK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGA Solutions CoLtd and SK Holdings Co, you can compare the effects of market volatilities on SGA Solutions and SK Holdings 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 SGA Solutions with a short position of SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGA Solutions and SK Holdings.
Diversification Opportunities for SGA Solutions and SK Holdings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SGA and 034730 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SGA Solutions CoLtd and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings and SGA Solutions 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 SGA Solutions CoLtd are associated (or correlated) with SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of SGA Solutions i.e., SGA Solutions and SK Holdings go up and down completely randomly.
Pair Corralation between SGA Solutions and SK Holdings
Assuming the 90 days trading horizon SGA Solutions is expected to generate 1.63 times less return on investment than SK Holdings. In addition to that, SGA Solutions is 1.74 times more volatile than SK Holdings Co. It trades about 0.08 of its total potential returns per unit of risk. SK Holdings Co is currently generating about 0.21 per unit of volatility. If you would invest 14,090,000 in SK Holdings Co on November 7, 2024 and sell it today you would earn a total of 720,000 from holding SK Holdings Co or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SGA Solutions CoLtd vs. SK Holdings Co
Performance |
| Timeline |
| SGA Solutions CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| SK Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SGA Solutions and SK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGA Solutions and SK Holdings
The main advantage of trading using opposite SGA Solutions and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGA Solutions position performs unexpectedly, SK Holdings 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 Holdings will offset losses from the drop in SK Holdings' long position.| SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Hyundai Motor Co | SGA Solutions vs. LG Electronics |
| SK Holdings vs. Koh Young Technology | SK Holdings vs. Hana Financial | SK Holdings vs. Samsung 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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