Correlation Between SK Bioscience and Daou Tech
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Daou Tech 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 Daou Tech 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 Daou Tech, you can compare the effects of market volatilities on SK Bioscience and Daou Tech 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 Daou Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Daou Tech.
Diversification Opportunities for SK Bioscience and Daou Tech
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 302440 and Daou is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Daou Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Tech 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 Daou Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Tech has no effect on the direction of SK Bioscience i.e., SK Bioscience and Daou Tech go up and down completely randomly.
Pair Corralation between SK Bioscience and Daou Tech
Assuming the 90 days trading horizon SK Bioscience Co is expected to under-perform the Daou Tech. In addition to that, SK Bioscience is 1.54 times more volatile than Daou Tech. It trades about -0.02 of its total potential returns per unit of risk. Daou Tech is currently generating about -0.01 per unit of volatility. If you would invest 2,077,105 in Daou Tech on November 19, 2024 and sell it today you would lose (271,105) from holding Daou Tech or give up 13.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Daou Tech
Performance |
| Timeline |
| SK Bioscience |
| Daou Tech |
SK Bioscience and Daou Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Daou Tech
The main advantage of trading using opposite SK Bioscience and Daou Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Daou Tech 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 Daou Tech will offset losses from the drop in Daou Tech's long position.| SK Bioscience vs. Duksan Hi Metal | SK Bioscience vs. Sangsangin Investment Securities | SK Bioscience vs. Daol Investment Securities | SK Bioscience vs. Leaders Technology Investment |
| Daou Tech vs. SK Telecom Co | Daou Tech vs. Cuckoo Homesys Co | Daou Tech vs. DoubleU Games Co | Daou Tech vs. SM Entertainment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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