Correlation Between SK Bioscience and Shinsegae
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Shinsegae 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 Shinsegae 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 Shinsegae, you can compare the effects of market volatilities on SK Bioscience and Shinsegae 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 Shinsegae. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Shinsegae.
Diversification Opportunities for SK Bioscience and Shinsegae
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 302440 and Shinsegae is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Shinsegae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae 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 Shinsegae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae has no effect on the direction of SK Bioscience i.e., SK Bioscience and Shinsegae go up and down completely randomly.
Pair Corralation between SK Bioscience and Shinsegae
Assuming the 90 days trading horizon SK Bioscience Co is expected to under-perform the Shinsegae. But the stock apears to be less risky and, when comparing its historical volatility, SK Bioscience Co is 1.1 times less risky than Shinsegae. The stock trades about -0.07 of its potential returns per unit of risk. The Shinsegae is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 13,270,000 in Shinsegae on November 27, 2024 and sell it today you would earn a total of 1,620,000 from holding Shinsegae or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Shinsegae
Performance |
| Timeline |
| SK Bioscience |
| Shinsegae |
SK Bioscience and Shinsegae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Shinsegae
The main advantage of trading using opposite SK Bioscience and Shinsegae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Shinsegae 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 Shinsegae will offset losses from the drop in Shinsegae's long position.| SK Bioscience vs. Kyeryong Construction Industrial | SK Bioscience vs. SBI Investment KOREA | SK Bioscience vs. Pureun Mutual Savings | SK Bioscience vs. PJ Metal Co |
| Shinsegae vs. Songwon Industrial Co | Shinsegae vs. Daejung Chemicals Metals | Shinsegae vs. SK Chemicals Co | Shinsegae vs. Samhwa Paint Industrial |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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