Correlation Between SKONEC Entertainment and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and InnoTherapy 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 InnoTherapy 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 InnoTherapy, you can compare the effects of market volatilities on SKONEC Entertainment and InnoTherapy 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 InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and InnoTherapy.
Diversification Opportunities for SKONEC Entertainment and InnoTherapy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SKONEC and InnoTherapy is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy 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 InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and InnoTherapy go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and InnoTherapy
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to under-perform the InnoTherapy. In addition to that, SKONEC Entertainment is 1.47 times more volatile than InnoTherapy. It trades about -0.06 of its total potential returns per unit of risk. InnoTherapy is currently generating about 0.01 per unit of volatility. If you would invest 885,000 in InnoTherapy on October 15, 2024 and sell it today you would earn a total of 23,000 from holding InnoTherapy or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. InnoTherapy
Performance |
| Timeline |
| SKONEC Entertainment |
| InnoTherapy |
SKONEC Entertainment and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and InnoTherapy
The main advantage of trading using opposite SKONEC Entertainment and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy's long position.| SKONEC Entertainment vs. Sungchang Autotech Co | SKONEC Entertainment vs. Sangsin Energy Display | SKONEC Entertainment vs. Ssangyong Information Communication | SKONEC Entertainment vs. Nable Communications |
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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.
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