Correlation Between SK Bioscience and Daou Data
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Daou Data 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 Data 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 Data Corp, you can compare the effects of market volatilities on SK Bioscience and Daou Data 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 Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Daou Data.
Diversification Opportunities for SK Bioscience and Daou Data
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 302440 and Daou is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp 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 Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of SK Bioscience i.e., SK Bioscience and Daou Data go up and down completely randomly.
Pair Corralation between SK Bioscience and Daou Data
Assuming the 90 days trading horizon SK Bioscience Co is expected to generate 0.77 times more return on investment than Daou Data. However, SK Bioscience Co is 1.3 times less risky than Daou Data. It trades about -0.03 of its potential returns per unit of risk. Daou Data Corp is currently generating about -0.07 per unit of risk. If you would invest 7,710,000 in SK Bioscience Co on August 31, 2024 and sell it today you would lose (2,800,000) from holding SK Bioscience Co or give up 36.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Daou Data Corp
Performance |
| Timeline |
| SK Bioscience |
| Daou Data Corp |
SK Bioscience and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Daou Data
The main advantage of trading using opposite SK Bioscience and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Daou Data 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 Data will offset losses from the drop in Daou Data's long position.| SK Bioscience vs. Lindeman Asia Investment | SK Bioscience vs. Samyung Trading Co | SK Bioscience vs. Nh Investment And | SK Bioscience vs. Digital Power Communications |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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