Correlation Between SK Bioscience and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Namyang Dairy 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 Bioscience and Namyang Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Bioscience Co and Namyang Dairy, you can compare the effects of market volatilities on SK Bioscience and Namyang Dairy 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 Bioscience with a short position of Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Namyang Dairy.
Diversification Opportunities for SK Bioscience and Namyang Dairy
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 302440 and Namyang is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy and SK Bioscience 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 Bioscience Co are associated (or correlated) with Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy has no effect on the direction of SK Bioscience i.e., SK Bioscience and Namyang Dairy go up and down completely randomly.
Pair Corralation between SK Bioscience and Namyang Dairy
Assuming the 90 days trading horizon SK Bioscience Co is expected to generate 0.26 times more return on investment than Namyang Dairy. However, SK Bioscience Co is 3.86 times less risky than Namyang Dairy. It trades about 0.19 of its potential returns per unit of risk. Namyang Dairy is currently generating about -0.23 per unit of risk. If you would invest 4,765,000 in SK Bioscience Co on September 13, 2024 and sell it today you would earn a total of 985,000 from holding SK Bioscience Co or generate 20.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SK Bioscience Co vs. Namyang Dairy
Performance |
| Timeline |
| SK Bioscience |
| Namyang Dairy |
SK Bioscience and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Namyang Dairy
The main advantage of trading using opposite SK Bioscience and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy's long position.| SK Bioscience vs. Kyeryong Construction Industrial | SK Bioscience vs. Kukdong Oil Chemicals | SK Bioscience vs. Dongwon Metal Co | SK Bioscience vs. Hannong Chemicals |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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