Correlation Between SK Bioscience and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Kyeryong Construction 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 Kyeryong Construction 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 Kyeryong Construction Industrial, you can compare the effects of market volatilities on SK Bioscience and Kyeryong Construction 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 Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Kyeryong Construction.
Diversification Opportunities for SK Bioscience and Kyeryong Construction
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 302440 and Kyeryong is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction 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 Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of SK Bioscience i.e., SK Bioscience and Kyeryong Construction go up and down completely randomly.
Pair Corralation between SK Bioscience and Kyeryong Construction
Assuming the 90 days trading horizon SK Bioscience Co is expected to generate 2.96 times more return on investment than Kyeryong Construction. However, SK Bioscience is 2.96 times more volatile than Kyeryong Construction Industrial. It trades about 0.18 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about 0.04 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 965,000 from holding SK Bioscience Co or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Kyeryong Construction Industri
Performance |
| Timeline |
| SK Bioscience |
| Kyeryong Construction |
SK Bioscience and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Kyeryong Construction
The main advantage of trading using opposite SK Bioscience and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| SK Bioscience vs. Ilji Technology Co | SK Bioscience vs. Woori Technology Investment | SK Bioscience vs. People Technology | SK Bioscience vs. NH Investment Securities |
| Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. SK Hynix | Kyeryong Construction vs. POSCO Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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