Correlation Between SK Bioscience and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Lindeman Asia 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 Lindeman Asia 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 Lindeman Asia Investment, you can compare the effects of market volatilities on SK Bioscience and Lindeman Asia 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 Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Lindeman Asia.
Diversification Opportunities for SK Bioscience and Lindeman Asia
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 302440 and Lindeman is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment 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 Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of SK Bioscience i.e., SK Bioscience and Lindeman Asia go up and down completely randomly.
Pair Corralation between SK Bioscience and Lindeman Asia
Assuming the 90 days trading horizon SK Bioscience Co is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, SK Bioscience Co is 1.79 times less risky than Lindeman Asia. The stock trades about -0.03 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 372,651 in Lindeman Asia Investment on September 2, 2024 and sell it today you would lose (30,651) from holding Lindeman Asia Investment or give up 8.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Lindeman Asia Investment
Performance |
| Timeline |
| SK Bioscience |
| Lindeman Asia Investment |
SK Bioscience and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Lindeman Asia
The main advantage of trading using opposite SK Bioscience and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| SK Bioscience vs. Shinsegae Information Communication | SK Bioscience vs. Eagon Industrial Co | SK Bioscience vs. Nable Communications | SK Bioscience vs. Nice Information Telecommunication |
| Lindeman Asia vs. Solution Advanced Technology | Lindeman Asia vs. Busan Industrial Co | Lindeman Asia vs. Busan Ind | Lindeman Asia vs. Mirae Asset Daewoo |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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