Correlation Between SK Chemicals and JC Chemical
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and JC Chemical 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 JC Chemical 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 JC Chemical Co, you can compare the effects of market volatilities on SK Chemicals and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and JC Chemical.
Diversification Opportunities for SK Chemicals and JC Chemical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 28513K and 137950 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of SK Chemicals i.e., SK Chemicals and JC Chemical go up and down completely randomly.
Pair Corralation between SK Chemicals and JC Chemical
Assuming the 90 days trading horizon SK Chemicals Co is expected to generate 0.57 times more return on investment than JC Chemical. However, SK Chemicals Co is 1.74 times less risky than JC Chemical. It trades about -0.11 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.08 per unit of risk. If you would invest 2,953,862 in SK Chemicals Co on November 5, 2024 and sell it today you would lose (1,068,862) from holding SK Chemicals Co or give up 36.19% 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. JC Chemical Co
Performance |
| Timeline |
| SK Chemicals |
| JC Chemical |
SK Chemicals and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and JC Chemical
The main advantage of trading using opposite SK Chemicals and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| SK Chemicals vs. Lake Materials Co | SK Chemicals vs. Taegu Broadcasting | SK Chemicals vs. TOPMATERIAL LTD | SK Chemicals vs. Hana Materials |
| JC Chemical vs. Samsung Electronics Co | JC Chemical vs. Samsung Electronics Co | JC Chemical vs. SK Hynix | JC Chemical vs. HMM 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |