Correlation Between SK Chemicals and KIWI Media
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and KIWI Media 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 KIWI Media 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 KIWI Media Group, you can compare the effects of market volatilities on SK Chemicals and KIWI Media 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 KIWI Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and KIWI Media.
Diversification Opportunities for SK Chemicals and KIWI Media
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 285130 and KIWI is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and KIWI Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIWI Media Group 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 KIWI Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIWI Media Group has no effect on the direction of SK Chemicals i.e., SK Chemicals and KIWI Media go up and down completely randomly.
Pair Corralation between SK Chemicals and KIWI Media
Assuming the 90 days trading horizon SK Chemicals Co is expected to generate 0.52 times more return on investment than KIWI Media. However, SK Chemicals Co is 1.91 times less risky than KIWI Media. It trades about -0.14 of its potential returns per unit of risk. KIWI Media Group is currently generating about -0.17 per unit of risk. If you would invest 4,490,000 in SK Chemicals Co on October 16, 2024 and sell it today you would lose (225,000) from holding SK Chemicals Co or give up 5.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. KIWI Media Group
Performance |
| Timeline |
| SK Chemicals |
| KIWI Media Group |
SK Chemicals and KIWI Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and KIWI Media
The main advantage of trading using opposite SK Chemicals and KIWI Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, KIWI Media 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 KIWI Media will offset losses from the drop in KIWI Media's long position.| SK Chemicals vs. HB Technology TD | SK Chemicals vs. Drb Industrial | SK Chemicals vs. LEENO Industrial | SK Chemicals vs. Hwangkum Steel Technology |
| KIWI Media vs. Lee Ku Industrial | KIWI Media vs. LEENO Industrial | KIWI Media vs. Jeju Semiconductor Corp | KIWI Media vs. PJ Metal 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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