Correlation Between SKONEC Entertainment and DONGKUK STEEL
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment and DONGKUK STEEL 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 DONGKUK STEEL 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 DONGKUK STEEL MILL, you can compare the effects of market volatilities on SKONEC Entertainment and DONGKUK STEEL 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 DONGKUK STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and DONGKUK STEEL.
Diversification Opportunities for SKONEC Entertainment and DONGKUK STEEL
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SKONEC and DONGKUK is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and DONGKUK STEEL MILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK STEEL MILL 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 DONGKUK STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK STEEL MILL has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and DONGKUK STEEL go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and DONGKUK STEEL
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 1.6 times more return on investment than DONGKUK STEEL. However, SKONEC Entertainment is 1.6 times more volatile than DONGKUK STEEL MILL. It trades about -0.02 of its potential returns per unit of risk. DONGKUK STEEL MILL is currently generating about -0.08 per unit of risk. If you would invest 313,500 in SKONEC Entertainment Co on September 1, 2024 and sell it today you would lose (7,000) from holding SKONEC Entertainment Co or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. DONGKUK STEEL MILL
Performance |
| Timeline |
| SKONEC Entertainment |
| DONGKUK STEEL MILL |
SKONEC Entertainment and DONGKUK STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and DONGKUK STEEL
The main advantage of trading using opposite SKONEC Entertainment and DONGKUK STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment position performs unexpectedly, DONGKUK STEEL 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 DONGKUK STEEL will offset losses from the drop in DONGKUK STEEL's long position.| SKONEC Entertainment vs. Devsisters corporation | SKONEC Entertainment vs. Konan Technology | SKONEC Entertainment vs. Nice Information Telecommunication | SKONEC Entertainment vs. InfoBank |
| DONGKUK STEEL vs. FNC Entertainment Co | DONGKUK STEEL vs. Next Entertainment World | DONGKUK STEEL vs. Nice Information Telecommunication | DONGKUK STEEL vs. SKONEC Entertainment 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |