Correlation Between SKONEC Entertainment and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on SKONEC Entertainment and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and Hanjoo Light.
Diversification Opportunities for SKONEC Entertainment and Hanjoo Light
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SKONEC and Hanjoo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and Hanjoo Light go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and Hanjoo Light
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 0.97 times more return on investment than Hanjoo Light. However, SKONEC Entertainment Co is 1.03 times less risky than Hanjoo Light. It trades about -0.06 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.09 per unit of risk. If you would invest 930,000 in SKONEC Entertainment Co on November 7, 2024 and sell it today you would lose (471,000) from holding SKONEC Entertainment Co or give up 50.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.16% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. Hanjoo Light Metal
Performance |
| Timeline |
| SKONEC Entertainment |
| Hanjoo Light Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SKONEC Entertainment and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and Hanjoo Light
The main advantage of trading using opposite SKONEC Entertainment and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| SKONEC Entertainment vs. Miwon Chemicals Co | SKONEC Entertainment vs. Neungyule Education | SKONEC Entertainment vs. Mobile Appliance | SKONEC Entertainment vs. Kaonmedia Co |
| Hanjoo Light vs. Hana Financial | Hanjoo Light vs. Hanwha Chemical Corp | Hanjoo Light vs. Settlebank | Hanjoo Light vs. Automobile Pc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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