Correlation Between Sk Biopharmaceutica and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Sk Biopharmaceutica and Kbi Metal 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 Biopharmaceutica and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sk Biopharmaceuticals Co and Kbi Metal Co, you can compare the effects of market volatilities on Sk Biopharmaceutica and Kbi Metal 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 Biopharmaceutica with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sk Biopharmaceutica and Kbi Metal.
Diversification Opportunities for Sk Biopharmaceutica and Kbi Metal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 326030 and Kbi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sk Biopharmaceuticals Co and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Sk Biopharmaceutica 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 Biopharmaceuticals Co are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Sk Biopharmaceutica i.e., Sk Biopharmaceutica and Kbi Metal go up and down completely randomly.
Pair Corralation between Sk Biopharmaceutica and Kbi Metal
Assuming the 90 days trading horizon Sk Biopharmaceutica is expected to generate 1.15 times less return on investment than Kbi Metal. But when comparing it to its historical volatility, Sk Biopharmaceuticals Co is 1.78 times less risky than Kbi Metal. It trades about 0.06 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 143,300 in Kbi Metal Co on November 19, 2024 and sell it today you would earn a total of 71,700 from holding Kbi Metal Co or generate 50.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sk Biopharmaceuticals Co vs. Kbi Metal Co
Performance |
| Timeline |
| Sk Biopharmaceuticals |
| Kbi Metal |
Sk Biopharmaceutica and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sk Biopharmaceutica and Kbi Metal
The main advantage of trading using opposite Sk Biopharmaceutica and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sk Biopharmaceutica position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Sk Biopharmaceutica vs. Samyung Trading Co | Sk Biopharmaceutica vs. E Investment Development | Sk Biopharmaceutica vs. Daejung Chemicals Metals | Sk Biopharmaceutica vs. DB Financial Investment |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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