Correlation Between SK Chemicals and Infinitt Healthcare
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Infinitt Healthcare 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 Infinitt Healthcare 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 Infinitt Healthcare Co, you can compare the effects of market volatilities on SK Chemicals and Infinitt Healthcare 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 Infinitt Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Infinitt Healthcare.
Diversification Opportunities for SK Chemicals and Infinitt Healthcare
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 28513K and Infinitt is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Infinitt Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinitt Healthcare 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 Infinitt Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinitt Healthcare has no effect on the direction of SK Chemicals i.e., SK Chemicals and Infinitt Healthcare go up and down completely randomly.
Pair Corralation between SK Chemicals and Infinitt Healthcare
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Infinitt Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.29 times less risky than Infinitt Healthcare. The stock trades about -0.13 of its potential returns per unit of risk. The Infinitt Healthcare Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 543,000 in Infinitt Healthcare Co on September 4, 2024 and sell it today you would lose (110,000) from holding Infinitt Healthcare Co or give up 20.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.37% |
| Values | Daily Returns |
SK Chemicals Co vs. Infinitt Healthcare Co
Performance |
| Timeline |
| SK Chemicals |
| Infinitt Healthcare |
SK Chemicals and Infinitt Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Infinitt Healthcare
The main advantage of trading using opposite SK Chemicals and Infinitt Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Infinitt Healthcare 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 Infinitt Healthcare will offset losses from the drop in Infinitt Healthcare's long position.The idea behind SK Chemicals Co and Infinitt Healthcare Co 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.| Infinitt Healthcare vs. AptaBio Therapeutics | Infinitt Healthcare vs. Daewoo SBI SPAC | Infinitt Healthcare vs. Dream Security co | Infinitt Healthcare 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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