Correlation Between SK Chemicals and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Shinsegae Information 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 Shinsegae Information 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 Shinsegae Information Communication, you can compare the effects of market volatilities on SK Chemicals and Shinsegae Information 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 Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Shinsegae Information.
Diversification Opportunities for SK Chemicals and Shinsegae Information
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 28513K and Shinsegae is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information 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 Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of SK Chemicals i.e., SK Chemicals and Shinsegae Information go up and down completely randomly.
Pair Corralation between SK Chemicals and Shinsegae Information
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Shinsegae Information. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.12 times less risky than Shinsegae Information. The stock trades about -0.16 of its potential returns per unit of risk. The Shinsegae Information Communication is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,124,000 in Shinsegae Information Communication on August 28, 2024 and sell it today you would lose (215,000) from holding Shinsegae Information Communication or give up 19.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Shinsegae Information Communic
Performance |
| Timeline |
| SK Chemicals |
| Shinsegae Information |
SK Chemicals and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Shinsegae Information
The main advantage of trading using opposite SK Chemicals and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.The idea behind SK Chemicals Co and Shinsegae Information Communication 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.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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