Correlation Between SK Chemicals and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Daelim Trading 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 Daelim Trading 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 Daelim Trading Co, you can compare the effects of market volatilities on SK Chemicals and Daelim Trading 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 Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Daelim Trading.
Diversification Opportunities for SK Chemicals and Daelim Trading
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 285130 and Daelim is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading 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 Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of SK Chemicals i.e., SK Chemicals and Daelim Trading go up and down completely randomly.
Pair Corralation between SK Chemicals and Daelim Trading
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Daelim Trading. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.04 times less risky than Daelim Trading. The stock trades about -0.08 of its potential returns per unit of risk. The Daelim Trading Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 298,929 in Daelim Trading Co on September 4, 2024 and sell it today you would lose (21,429) from holding Daelim Trading Co or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
SK Chemicals Co vs. Daelim Trading Co
Performance |
| Timeline |
| SK Chemicals |
| Daelim Trading |
SK Chemicals and Daelim Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Daelim Trading
The main advantage of trading using opposite SK Chemicals and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Lotte Chemical Corp | SK Chemicals vs. Hyundai Steel |
| Daelim Trading vs. MediaZen | Daelim Trading vs. SKONEC Entertainment Co | Daelim Trading vs. SM Entertainment Co | Daelim Trading vs. Barunson Entertainment Arts |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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