Correlation Between SK Chemicals and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Netmarble Games 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 Netmarble Games 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 Netmarble Games Corp, you can compare the effects of market volatilities on SK Chemicals and Netmarble Games 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 Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Netmarble Games.
Diversification Opportunities for SK Chemicals and Netmarble Games
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 285130 and Netmarble is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Netmarble Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmarble Games Corp 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 Netmarble Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmarble Games Corp has no effect on the direction of SK Chemicals i.e., SK Chemicals and Netmarble Games go up and down completely randomly.
Pair Corralation between SK Chemicals and Netmarble Games
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Netmarble Games. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.54 times less risky than Netmarble Games. The stock trades about -0.33 of its potential returns per unit of risk. The Netmarble Games Corp is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 5,750,000 in Netmarble Games Corp on August 29, 2024 and sell it today you would lose (740,000) from holding Netmarble Games Corp or give up 12.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Netmarble Games Corp
Performance |
| Timeline |
| SK Chemicals |
| Netmarble Games Corp |
SK Chemicals and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Netmarble Games
The main advantage of trading using opposite SK Chemicals and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Netmarble Games 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 Netmarble Games will offset losses from the drop in Netmarble Games' long position.| SK Chemicals vs. LG Chemicals | SK Chemicals vs. Lotte Chemical Corp | SK Chemicals vs. Hyundai Steel | SK Chemicals vs. Seah Steel Corp |
| Netmarble Games vs. AfreecaTV Co | Netmarble Games vs. SS TECH | Netmarble Games vs. Busan Industrial Co | Netmarble Games vs. Busan Ind |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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