Correlation Between SK Chemicals and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Daeduck Electronics 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 Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on SK Chemicals and Daeduck Electronics 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Daeduck Electronics.
Diversification Opportunities for SK Chemicals and Daeduck Electronics
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 28513K and Daeduck is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of SK Chemicals i.e., SK Chemicals and Daeduck Electronics go up and down completely randomly.
Pair Corralation between SK Chemicals and Daeduck Electronics
Assuming the 90 days trading horizon SK Chemicals Co is expected to generate 2.09 times more return on investment than Daeduck Electronics. However, SK Chemicals is 2.09 times more volatile than Daeduck Electronics Co. It trades about 0.19 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.2 per unit of risk. If you would invest 1,885,000 in SK Chemicals Co on December 1, 2024 and sell it today you would earn a total of 130,000 from holding SK Chemicals Co or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Daeduck Electronics Co
Performance |
| Timeline |
| SK Chemicals |
| Daeduck Electronics |
SK Chemicals and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Daeduck Electronics
The main advantage of trading using opposite SK Chemicals and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| SK Chemicals vs. Dongbang Transport Logistics | SK Chemicals vs. Nice Information Telecommunication | SK Chemicals vs. LS Materials | SK Chemicals vs. Daejoo Electronic Materials |
| Daeduck Electronics vs. Nam Hwa Construction | Daeduck Electronics vs. Tuksu Engineering ConstructionLtd | Daeduck Electronics vs. Ssangyong Information Communication | Daeduck Electronics vs. Dongwoo Farm To |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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