Correlation Between SK Chemicals and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Puloon Technology 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 Puloon Technology 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 Puloon Technology, you can compare the effects of market volatilities on SK Chemicals and Puloon Technology 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Puloon Technology.
Diversification Opportunities for SK Chemicals and Puloon Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 285130 and Puloon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of SK Chemicals i.e., SK Chemicals and Puloon Technology go up and down completely randomly.
Pair Corralation between SK Chemicals and Puloon Technology
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Puloon Technology. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.89 times less risky than Puloon Technology. The stock trades about -0.04 of its potential returns per unit of risk. The Puloon Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 599,555 in Puloon Technology on September 20, 2024 and sell it today you would earn a total of 116,445 from holding Puloon Technology or generate 19.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
SK Chemicals Co vs. Puloon Technology
Performance |
| Timeline |
| SK Chemicals |
| Puloon Technology |
SK Chemicals and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Puloon Technology
The main advantage of trading using opposite SK Chemicals and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Puloon Technology 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Hanwha Solutions | SK Chemicals vs. Lotte Chemical Corp |
| Puloon Technology vs. Cube Entertainment | Puloon Technology vs. Dreamus Company | Puloon Technology vs. LG Energy Solution | Puloon Technology vs. Dongwon System |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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