Correlation Between SK Square and PI Advanced
Can any of the company-specific risk be diversified away by investing in both SK Square and PI Advanced 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 PI Advanced 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 PI Advanced Materials, you can compare the effects of market volatilities on SK Square and PI Advanced 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 PI Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Square and PI Advanced.
Diversification Opportunities for SK Square and PI Advanced
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 402340 and 178920 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SK Square Co and PI Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Advanced Materials 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 PI Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Advanced Materials has no effect on the direction of SK Square i.e., SK Square and PI Advanced go up and down completely randomly.
Pair Corralation between SK Square and PI Advanced
Assuming the 90 days trading horizon SK Square Co is expected to generate 0.94 times more return on investment than PI Advanced. However, SK Square Co is 1.06 times less risky than PI Advanced. It trades about 0.07 of its potential returns per unit of risk. PI Advanced Materials is currently generating about -0.02 per unit of risk. If you would invest 3,580,000 in SK Square Co on September 3, 2024 and sell it today you would earn a total of 3,770,000 from holding SK Square Co or generate 105.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Square Co vs. PI Advanced Materials
Performance |
| Timeline |
| SK Square |
| PI Advanced Materials |
SK Square and PI Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Square and PI Advanced
The main advantage of trading using opposite SK Square and PI Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Square position performs unexpectedly, PI Advanced 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 PI Advanced will offset losses from the drop in PI Advanced's long position.| SK Square vs. PI Advanced Materials | SK Square vs. Top Material Co | SK Square vs. Daewoo Engineering Construction | SK Square vs. Ssangyong Materials Corp |
| PI Advanced vs. Lotte Non Life Insurance | PI Advanced vs. Display Tech Co | PI Advanced vs. Korean Reinsurance Co | PI Advanced vs. Grand Korea Leisure |
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.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |