Correlation Between SK Chemicals and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Shinil Electronics 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 SK Chemicals and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Chemicals Co and Shinil Electronics Co, you can compare the effects of market volatilities on SK Chemicals and Shinil Electronics 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 SK Chemicals with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Shinil Electronics.
Diversification Opportunities for SK Chemicals and Shinil Electronics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 285130 and Shinil is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and SK Chemicals 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 SK Chemicals Co are associated (or correlated) with Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of SK Chemicals i.e., SK Chemicals and Shinil Electronics go up and down completely randomly.
Pair Corralation between SK Chemicals and Shinil Electronics
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Shinil Electronics. In addition to that, SK Chemicals is 1.5 times more volatile than Shinil Electronics Co. It trades about -0.33 of its total potential returns per unit of risk. Shinil Electronics Co is currently generating about 0.04 per unit of volatility. If you would invest 144,000 in Shinil Electronics Co on August 29, 2024 and sell it today you would earn a total of 1,200 from holding Shinil Electronics Co or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Shinil Electronics Co
Performance |
| Timeline |
| SK Chemicals |
| Shinil Electronics |
SK Chemicals and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Shinil Electronics
The main advantage of trading using opposite SK Chemicals and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| SK Chemicals vs. LG Chemicals | SK Chemicals vs. Lotte Chemical Corp | SK Chemicals vs. Hyundai Steel | SK Chemicals vs. Seah Steel Corp |
| Shinil Electronics vs. Busan Industrial Co | Shinil Electronics vs. Busan Ind | Shinil Electronics vs. Mirae Asset Daewoo | Shinil Electronics vs. UNISEM 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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