Correlation Between SKONEC Entertainment and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and INFINITT Healthcare 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 INFINITT Healthcare 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 INFINITT Healthcare Co, you can compare the effects of market volatilities on SKONEC Entertainment and INFINITT Healthcare 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 INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and INFINITT Healthcare.
Diversification Opportunities for SKONEC Entertainment and INFINITT Healthcare
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKONEC and INFINITT is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare 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 INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and INFINITT Healthcare
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 2.73 times more return on investment than INFINITT Healthcare. However, SKONEC Entertainment is 2.73 times more volatile than INFINITT Healthcare Co. It trades about 0.44 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about 0.14 per unit of risk. If you would invest 347,000 in SKONEC Entertainment Co on November 8, 2024 and sell it today you would earn a total of 146,000 from holding SKONEC Entertainment Co or generate 42.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. INFINITT Healthcare Co
Performance |
| Timeline |
| SKONEC Entertainment |
| INFINITT Healthcare |
SKONEC Entertainment and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and INFINITT Healthcare
The main advantage of trading using opposite SKONEC Entertainment and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, INFINITT Healthcare 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 INFINITT Healthcare will offset losses from the drop in INFINITT Healthcare's long position.| SKONEC Entertainment vs. Kakao Games Corp | SKONEC Entertainment vs. Posco ICT | SKONEC Entertainment vs. Devsisters corporation | SKONEC Entertainment vs. Konan Technology |
| INFINITT Healthcare vs. Asiana Airlines | INFINITT Healthcare vs. SungMoon Electronics Co | INFINITT Healthcare vs. Korea Petro Chemical | INFINITT Healthcare vs. Hankook Furniture Co |
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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