Correlation Between SK Chemicals and TJ Media
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and TJ 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 TJ 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 TJ media Co, you can compare the effects of market volatilities on SK Chemicals and TJ 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 TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and TJ Media.
Diversification Opportunities for SK Chemicals and TJ Media
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 285130 and 032540 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media 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 TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of SK Chemicals i.e., SK Chemicals and TJ Media go up and down completely randomly.
Pair Corralation between SK Chemicals and TJ Media
Assuming the 90 days trading horizon SK Chemicals is expected to generate 55.65 times less return on investment than TJ Media. In addition to that, SK Chemicals is 1.76 times more volatile than TJ media Co. It trades about 0.0 of its total potential returns per unit of risk. TJ media Co is currently generating about 0.2 per unit of volatility. If you would invest 439,489 in TJ media Co on October 30, 2024 and sell it today you would earn a total of 49,511 from holding TJ media Co or generate 11.27% 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. TJ media Co
Performance |
| Timeline |
| SK Chemicals |
| TJ media |
SK Chemicals and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and TJ Media
The main advantage of trading using opposite SK Chemicals and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, TJ 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 TJ Media will offset losses from the drop in TJ Media's long position.| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Hanwha Solutions | SK Chemicals vs. Lotte Chemical Corp |
| TJ Media vs. Ssangyong Information Communication | TJ Media vs. Incar Financial Service | TJ Media vs. DB Insurance Co | TJ Media vs. KB Financial Group |
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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