Correlation Between Cuckoo Electronics and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Cuckoo 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 Cuckoo 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 Cuckoo Electronics Co and SK Chemicals Co, you can compare the effects of market volatilities on Cuckoo 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 Cuckoo Electronics with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and SK Chemicals.
Diversification Opportunities for Cuckoo Electronics and SK Chemicals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cuckoo and 28513K is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo 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 Cuckoo 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 Cuckoo 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 Cuckoo Electronics i.e., Cuckoo Electronics and SK Chemicals go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and SK Chemicals
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to under-perform the SK Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Cuckoo Electronics Co is 2.38 times less risky than SK Chemicals. The stock trades about -0.22 of its potential returns per unit of risk. The SK Chemicals Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,885,000 in SK Chemicals Co on December 1, 2024 and sell it today you would earn a total of 130,000 from holding SK Chemicals Co or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. SK Chemicals Co
Performance |
| Timeline |
| Cuckoo Electronics |
| SK Chemicals |
Cuckoo Electronics and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and SK Chemicals
The main advantage of trading using opposite Cuckoo Electronics and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo 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.| Cuckoo Electronics vs. Digital Power Communications | Cuckoo Electronics vs. Choil Aluminum | Cuckoo Electronics vs. Daejung Chemicals Metals | Cuckoo Electronics vs. ZUM Internet Corp |
| SK Chemicals vs. Dongbang Transport Logistics | SK Chemicals vs. Nice Information Telecommunication | SK Chemicals vs. LS Materials | SK Chemicals vs. Daejoo Electronic 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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