Correlation Between SK Chemicals and Samsung Fire
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Samsung Fire 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 Samsung Fire 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 Samsung Fire Marine, you can compare the effects of market volatilities on SK Chemicals and Samsung Fire 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 Samsung Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Samsung Fire.
Diversification Opportunities for SK Chemicals and Samsung Fire
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 28513K and Samsung is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Samsung Fire Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Fire Marine 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 Samsung Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Fire Marine has no effect on the direction of SK Chemicals i.e., SK Chemicals and Samsung Fire go up and down completely randomly.
Pair Corralation between SK Chemicals and Samsung Fire
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Samsung Fire. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.98 times less risky than Samsung Fire. The stock trades about -0.15 of its potential returns per unit of risk. The Samsung Fire Marine is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 31,000,000 in Samsung Fire Marine on September 3, 2024 and sell it today you would earn a total of 8,250,000 from holding Samsung Fire Marine or generate 26.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Samsung Fire Marine
Performance |
| Timeline |
| SK Chemicals |
| Samsung Fire Marine |
SK Chemicals and Samsung Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Samsung Fire
The main advantage of trading using opposite SK Chemicals and Samsung Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Samsung Fire 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 Samsung Fire will offset losses from the drop in Samsung Fire's long position.The idea behind SK Chemicals Co and Samsung Fire Marine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Samsung Fire vs. Inzi Display CoLtd | Samsung Fire vs. Samyoung Electronics Co | Samsung Fire vs. Display Tech Co | Samsung Fire vs. KyungIn Electronics 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |