Correlation Between SK Square and SS TECH
Can any of the company-specific risk be diversified away by investing in both SK Square and SS TECH 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 Square and SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Square Co and SS TECH, you can compare the effects of market volatilities on SK Square and SS TECH 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 Square with a short position of SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Square and SS TECH.
Diversification Opportunities for SK Square and SS TECH
Good diversification
The 3 months correlation between 402340 and 101490 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SK Square Co and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH and SK Square 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 Square Co are associated (or correlated) with SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of SK Square i.e., SK Square and SS TECH go up and down completely randomly.
Pair Corralation between SK Square and SS TECH
Assuming the 90 days trading horizon SK Square Co is expected to generate 1.11 times more return on investment than SS TECH. However, SK Square is 1.11 times more volatile than SS TECH. It trades about 0.08 of its potential returns per unit of risk. SS TECH is currently generating about -0.05 per unit of risk. If you would invest 4,710,000 in SK Square Co on September 14, 2024 and sell it today you would earn a total of 3,540,000 from holding SK Square Co or generate 75.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
SK Square Co vs. SS TECH
Performance |
| Timeline |
| SK Square |
| SS TECH |
SK Square and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Square and SS TECH
The main advantage of trading using opposite SK Square and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Square position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| SK Square vs. SS TECH | SK Square vs. V One Tech Co | SK Square vs. Spolytech Co | SK Square vs. SCI Information Service |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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