Correlation Between Jeju Beer and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and SK Chemicals 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 Jeju Beer and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Beer Co and SK Chemicals Co, you can compare the effects of market volatilities on Jeju Beer and SK Chemicals 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 Jeju Beer with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and SK Chemicals.
Diversification Opportunities for Jeju Beer and SK Chemicals
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeju and 285130 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Jeju Beer 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 Jeju Beer Co are associated (or correlated) with SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Jeju Beer i.e., Jeju Beer and SK Chemicals go up and down completely randomly.
Pair Corralation between Jeju Beer and SK Chemicals
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the SK Chemicals. In addition to that, Jeju Beer is 2.19 times more volatile than SK Chemicals Co. It trades about -0.03 of its total potential returns per unit of risk. SK Chemicals Co is currently generating about -0.05 per unit of volatility. If you would invest 7,907,097 in SK Chemicals Co on October 11, 2024 and sell it today you would lose (3,557,097) from holding SK Chemicals Co or give up 44.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. SK Chemicals Co
Performance |
| Timeline |
| Jeju Beer |
| SK Chemicals |
Jeju Beer and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and SK Chemicals
The main advantage of trading using opposite Jeju Beer and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| SK Chemicals vs. Daewon Chemical Co | SK Chemicals vs. Jeju Beer Co | SK Chemicals vs. Tae Kyung Chemical | SK Chemicals vs. JC Chemical 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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