Correlation Between Sk Biopharmaceutica and SM Entertainment
Can any of the company-specific risk be diversified away by investing in both Sk Biopharmaceutica and SM Entertainment 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 SM Entertainment 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 SM Entertainment Co, you can compare the effects of market volatilities on Sk Biopharmaceutica and SM Entertainment 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 SM Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sk Biopharmaceutica and SM Entertainment.
Diversification Opportunities for Sk Biopharmaceutica and SM Entertainment
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 326030 and 041510 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sk Biopharmaceuticals Co and SM Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Entertainment 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 SM Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Entertainment has no effect on the direction of Sk Biopharmaceutica i.e., Sk Biopharmaceutica and SM Entertainment go up and down completely randomly.
Pair Corralation between Sk Biopharmaceutica and SM Entertainment
Assuming the 90 days trading horizon Sk Biopharmaceutica is expected to generate 1.2 times less return on investment than SM Entertainment. But when comparing it to its historical volatility, Sk Biopharmaceuticals Co is 1.18 times less risky than SM Entertainment. It trades about 0.04 of its potential returns per unit of risk. SM Entertainment Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,360,000 in SM Entertainment Co on September 1, 2024 and sell it today you would earn a total of 1,120,000 from holding SM Entertainment Co or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.45% |
| Values | Daily Returns |
Sk Biopharmaceuticals Co vs. SM Entertainment Co
Performance |
| Timeline |
| Sk Biopharmaceuticals |
| SM Entertainment |
Sk Biopharmaceutica and SM Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sk Biopharmaceutica and SM Entertainment
The main advantage of trading using opposite Sk Biopharmaceutica and SM Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sk Biopharmaceutica position performs unexpectedly, SM Entertainment 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 SM Entertainment will offset losses from the drop in SM Entertainment's long position.| Sk Biopharmaceutica vs. SK Bioscience Co | Sk Biopharmaceutica vs. MedPacto | Sk Biopharmaceutica vs. Prestige Biologics Co |
| SM Entertainment vs. YG Entertainment | SM Entertainment vs. JYP Entertainment | SM Entertainment vs. Cube Entertainment | SM Entertainment vs. FNC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |