Correlation Between SKONEC Entertainment and Dongnam Chemical
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and Dongnam Chemical 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 SKONEC Entertainment and Dongnam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SKONEC Entertainment Co and Dongnam Chemical Co, you can compare the effects of market volatilities on SKONEC Entertainment and Dongnam Chemical 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 SKONEC Entertainment with a short position of Dongnam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and Dongnam Chemical.
Diversification Opportunities for SKONEC Entertainment and Dongnam Chemical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SKONEC and Dongnam is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and Dongnam Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnam Chemical and SKONEC Entertainment 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 SKONEC Entertainment Co are associated (or correlated) with Dongnam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnam Chemical has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and Dongnam Chemical go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and Dongnam Chemical
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 11.25 times more return on investment than Dongnam Chemical. However, SKONEC Entertainment is 11.25 times more volatile than Dongnam Chemical Co. It trades about 0.38 of its potential returns per unit of risk. Dongnam Chemical Co is currently generating about 0.11 per unit of risk. If you would invest 344,000 in SKONEC Entertainment Co on November 7, 2024 and sell it today you would earn a total of 115,000 from holding SKONEC Entertainment Co or generate 33.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. Dongnam Chemical Co
Performance |
| Timeline |
| SKONEC Entertainment |
| Dongnam Chemical |
SKONEC Entertainment and Dongnam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and Dongnam Chemical
The main advantage of trading using opposite SKONEC Entertainment and Dongnam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, Dongnam Chemical 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 Dongnam Chemical will offset losses from the drop in Dongnam Chemical's long position.| SKONEC Entertainment vs. Miwon Chemicals Co | SKONEC Entertainment vs. Neungyule Education | SKONEC Entertainment vs. Mobile Appliance | SKONEC Entertainment vs. Kaonmedia Co |
| Dongnam Chemical vs. Dongbang Transport Logistics | Dongnam Chemical vs. Hanwha Chemical Corp | Dongnam Chemical vs. Aekyung Petrochemical Co | Dongnam Chemical vs. Samick Musical Instruments |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |