Correlation Between Lindeman Asia and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and SK Bioscience 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 Lindeman Asia and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindeman Asia Investment and SK Bioscience Co, you can compare the effects of market volatilities on Lindeman Asia and SK Bioscience 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 Lindeman Asia with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and SK Bioscience.
Diversification Opportunities for Lindeman Asia and SK Bioscience
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lindeman and 302440 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and Lindeman Asia 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 Lindeman Asia Investment are associated (or correlated) with SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and SK Bioscience go up and down completely randomly.
Pair Corralation between Lindeman Asia and SK Bioscience
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to generate 1.18 times more return on investment than SK Bioscience. However, Lindeman Asia is 1.18 times more volatile than SK Bioscience Co. It trades about -0.11 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.17 per unit of risk. If you would invest 376,500 in Lindeman Asia Investment on September 2, 2024 and sell it today you would lose (34,500) from holding Lindeman Asia Investment or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. SK Bioscience Co
Performance |
| Timeline |
| Lindeman Asia Investment |
| SK Bioscience |
Lindeman Asia and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and SK Bioscience
The main advantage of trading using opposite Lindeman Asia and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, SK Bioscience 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 Bioscience will offset losses from the drop in SK Bioscience's long position.| Lindeman Asia vs. Solution Advanced Technology | Lindeman Asia vs. Busan Industrial Co | Lindeman Asia vs. Busan Ind | Lindeman Asia vs. Mirae Asset Daewoo |
| SK Bioscience vs. Shinsegae Information Communication | SK Bioscience vs. Eagon Industrial Co | SK Bioscience vs. Nable Communications | SK Bioscience vs. Nice Information Telecommunication |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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