Correlation Between SK Chemicals and GiantStep
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and GiantStep 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 GiantStep 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 GiantStep Co, you can compare the effects of market volatilities on SK Chemicals and GiantStep 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 GiantStep. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and GiantStep.
Diversification Opportunities for SK Chemicals and GiantStep
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 28513K and GiantStep is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep 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 GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of SK Chemicals i.e., SK Chemicals and GiantStep go up and down completely randomly.
Pair Corralation between SK Chemicals and GiantStep
Assuming the 90 days trading horizon SK Chemicals Co is expected to generate 0.18 times more return on investment than GiantStep. However, SK Chemicals Co is 5.53 times less risky than GiantStep. It trades about -0.66 of its potential returns per unit of risk. GiantStep Co is currently generating about -0.15 per unit of risk. If you would invest 2,035,000 in SK Chemicals Co on November 4, 2024 and sell it today you would lose (150,000) from holding SK Chemicals Co or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. GiantStep Co
Performance |
| Timeline |
| SK Chemicals |
| GiantStep |
SK Chemicals and GiantStep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and GiantStep
The main advantage of trading using opposite SK Chemicals and GiantStep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, GiantStep 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 GiantStep will offset losses from the drop in GiantStep's long position.| SK Chemicals vs. Lake Materials Co | SK Chemicals vs. Taegu Broadcasting | SK Chemicals vs. TOPMATERIAL LTD | SK Chemicals vs. Hana Materials |
| GiantStep vs. Golden Bridge Investment | GiantStep vs. Sangsangin Investment Securities | GiantStep vs. Union Materials Corp | GiantStep vs. Daejoo Electronic Materials |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |