Correlation Between SK Bioscience and Korea New
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on SK Bioscience and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Korea New.
Diversification Opportunities for SK Bioscience and Korea New
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between 302440 and Korea is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of SK Bioscience i.e., SK Bioscience and Korea New go up and down completely randomly.
Pair Corralation between SK Bioscience and Korea New
Assuming the 90 days trading horizon SK Bioscience Co is expected to under-perform the Korea New. In addition to that, SK Bioscience is 1.17 times more volatile than Korea New Network. It trades about -0.06 of its total potential returns per unit of risk. Korea New Network is currently generating about -0.05 per unit of volatility. If you would invest 100,096 in Korea New Network on August 26, 2024 and sell it today you would lose (21,396) from holding Korea New Network or give up 21.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Korea New Network
Performance |
| Timeline |
| SK Bioscience |
| Korea New Network |
SK Bioscience and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Korea New
The main advantage of trading using opposite SK Bioscience and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.The idea behind SK Bioscience Co and Korea New Network pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Korea New vs. Korean Air Lines | Korea New vs. Hanjoo Light Metal | Korea New vs. Jeju Air Co | Korea New vs. Daedong Metals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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