Correlation Between SK Chemicals and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and INFINITT Healthcare 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 INFINITT Healthcare 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 INFINITT Healthcare Co, you can compare the effects of market volatilities on SK Chemicals and INFINITT Healthcare 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 INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and INFINITT Healthcare.
Diversification Opportunities for SK Chemicals and INFINITT Healthcare
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 285130 and INFINITT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare 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 INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of SK Chemicals i.e., SK Chemicals and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between SK Chemicals and INFINITT Healthcare
Assuming the 90 days trading horizon SK Chemicals Co is expected to generate 1.91 times more return on investment than INFINITT Healthcare. However, SK Chemicals is 1.91 times more volatile than INFINITT Healthcare Co. It trades about -0.09 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about -0.18 per unit of risk. If you would invest 4,500,000 in SK Chemicals Co on October 12, 2024 and sell it today you would lose (150,000) from holding SK Chemicals Co or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. INFINITT Healthcare Co
Performance |
| Timeline |
| SK Chemicals |
| INFINITT Healthcare |
SK Chemicals and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and INFINITT Healthcare
The main advantage of trading using opposite SK Chemicals and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, INFINITT Healthcare 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 INFINITT Healthcare will offset losses from the drop in INFINITT Healthcare's long position.| SK Chemicals vs. Daewon Chemical Co | SK Chemicals vs. Jeju Beer Co | SK Chemicals vs. Tae Kyung Chemical | SK Chemicals vs. JC Chemical Co |
| INFINITT Healthcare vs. InfoBank | INFINITT Healthcare vs. BNK Financial Group | INFINITT Healthcare vs. SK Chemicals Co | INFINITT Healthcare vs. KPX Green Chemical |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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