Correlation Between Sk Biopharmaceutica and Korea Aerospace
Can any of the company-specific risk be diversified away by investing in both Sk Biopharmaceutica and Korea Aerospace 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 Korea Aerospace 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 Korea Aerospace Industries, you can compare the effects of market volatilities on Sk Biopharmaceutica and Korea Aerospace 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 Korea Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sk Biopharmaceutica and Korea Aerospace.
Diversification Opportunities for Sk Biopharmaceutica and Korea Aerospace
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 326030 and Korea is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sk Biopharmaceuticals Co and Korea Aerospace Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Aerospace Indu 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 Korea Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Aerospace Indu has no effect on the direction of Sk Biopharmaceutica i.e., Sk Biopharmaceutica and Korea Aerospace go up and down completely randomly.
Pair Corralation between Sk Biopharmaceutica and Korea Aerospace
Assuming the 90 days trading horizon Sk Biopharmaceuticals Co is expected to generate 1.79 times more return on investment than Korea Aerospace. However, Sk Biopharmaceutica is 1.79 times more volatile than Korea Aerospace Industries. It trades about 0.1 of its potential returns per unit of risk. Korea Aerospace Industries is currently generating about -0.15 per unit of risk. If you would invest 10,450,000 in Sk Biopharmaceuticals Co on October 25, 2024 and sell it today you would earn a total of 430,000 from holding Sk Biopharmaceuticals Co or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sk Biopharmaceuticals Co vs. Korea Aerospace Industries
Performance |
| Timeline |
| Sk Biopharmaceuticals |
| Korea Aerospace Indu |
Sk Biopharmaceutica and Korea Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sk Biopharmaceutica and Korea Aerospace
The main advantage of trading using opposite Sk Biopharmaceutica and Korea Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sk Biopharmaceutica position performs unexpectedly, Korea Aerospace 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 Aerospace will offset losses from the drop in Korea Aerospace's long position.| Sk Biopharmaceutica vs. Ssangyong Materials Corp | Sk Biopharmaceutica vs. Daejung Chemicals Metals | Sk Biopharmaceutica vs. Hana Materials | Sk Biopharmaceutica vs. PI Advanced Materials |
| Korea Aerospace vs. Samsung Electronics Co | Korea Aerospace vs. Samsung Electronics Co | Korea Aerospace vs. KB Financial Group | Korea Aerospace vs. Shinhan Financial Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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