Correlation Between SK Chemicals and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Chorokbaem 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 Chorokbaem 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 Chorokbaem Healthcare Co, you can compare the effects of market volatilities on SK Chemicals and Chorokbaem 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 Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Chorokbaem Healthcare.
Diversification Opportunities for SK Chemicals and Chorokbaem Healthcare
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 28513K and Chorokbaem is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem 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 Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of SK Chemicals i.e., SK Chemicals and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between SK Chemicals and Chorokbaem Healthcare
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Chorokbaem Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 2.18 times less risky than Chorokbaem Healthcare. The stock trades about -0.09 of its potential returns per unit of risk. The Chorokbaem Healthcare Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 61,600 in Chorokbaem Healthcare Co on August 28, 2024 and sell it today you would lose (28,800) from holding Chorokbaem Healthcare Co or give up 46.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| SK Chemicals |
| Chorokbaem Healthcare |
SK Chemicals and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Chorokbaem Healthcare
The main advantage of trading using opposite SK Chemicals and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Chorokbaem 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.| SK Chemicals vs. CG Hi Tech | SK Chemicals vs. TS Investment Corp | SK Chemicals vs. Nh Investment And | SK Chemicals vs. Pureun Mutual Savings |
| Chorokbaem Healthcare vs. Medy Tox | Chorokbaem Healthcare vs. Busan Industrial Co | Chorokbaem Healthcare vs. Busan Ind | Chorokbaem Healthcare vs. Mirae Asset Daewoo |
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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