Correlation Between SKONEC Entertainment and Konan Technology
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on SKONEC Entertainment and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and Konan Technology.
Diversification Opportunities for SKONEC Entertainment and Konan Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKONEC and Konan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and Konan Technology go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and Konan Technology
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to under-perform the Konan Technology. But the stock apears to be less risky and, when comparing its historical volatility, SKONEC Entertainment Co is 3.69 times less risky than Konan Technology. The stock trades about -0.27 of its potential returns per unit of risk. The Konan Technology is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,440,000 in Konan Technology on August 29, 2024 and sell it today you would earn a total of 1,090,000 from holding Konan Technology or generate 75.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. Konan Technology
Performance |
| Timeline |
| SKONEC Entertainment |
| Konan Technology |
SKONEC Entertainment and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and Konan Technology
The main advantage of trading using opposite SKONEC Entertainment and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| SKONEC Entertainment vs. Busan Industrial Co | SKONEC Entertainment vs. Busan Ind | SKONEC Entertainment vs. Shinhan WTI Futures | SKONEC Entertainment vs. Finebesteel |
| Konan Technology vs. Moonbae Steel | Konan Technology vs. LG Electronics Pfd | Konan Technology vs. Sunny Electronics Corp | Konan Technology vs. Hankook Steel 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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