Correlation Between SKONEC Entertainment and Insung Information
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on SKONEC Entertainment and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and Insung Information.
Diversification Opportunities for SKONEC Entertainment and Insung Information
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SKONEC and Insung is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and Insung Information go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and Insung Information
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 1.2 times more return on investment than Insung Information. However, SKONEC Entertainment is 1.2 times more volatile than Insung Information Co. It trades about 0.24 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.04 per unit of risk. If you would invest 269,500 in SKONEC Entertainment Co on September 25, 2024 and sell it today you would earn a total of 61,500 from holding SKONEC Entertainment Co or generate 22.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. Insung Information Co
Performance |
| Timeline |
| SKONEC Entertainment |
| Insung Information |
SKONEC Entertainment and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and Insung Information
The main advantage of trading using opposite SKONEC Entertainment and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| SKONEC Entertainment vs. Daesung Hi Tech Co | SKONEC Entertainment vs. Digital Power Communications | SKONEC Entertainment vs. Nice Information Telecommunication | SKONEC Entertainment vs. Hankuk Steel Wire |
| Insung Information vs. Infinitt Healthcare Co | Insung Information vs. Korean Reinsurance Co | Insung Information vs. Incar Financial Service | Insung Information vs. Settlebank |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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