Correlation Between Kbi Metal and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and SK Bioscience 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 Kbi Metal and SK Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and SK Bioscience Co, you can compare the effects of market volatilities on Kbi Metal and SK Bioscience 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 Kbi Metal with a short position of SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and SK Bioscience.
Diversification Opportunities for Kbi Metal and SK Bioscience
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kbi and 302440 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of Kbi Metal i.e., Kbi Metal and SK Bioscience go up and down completely randomly.
Pair Corralation between Kbi Metal and SK Bioscience
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 1.8 times more return on investment than SK Bioscience. However, Kbi Metal is 1.8 times more volatile than SK Bioscience Co. It trades about 0.04 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.01 per unit of risk. If you would invest 124,500 in Kbi Metal Co on September 20, 2024 and sell it today you would earn a total of 85,500 from holding Kbi Metal Co or generate 68.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kbi Metal Co vs. SK Bioscience Co
Performance |
Timeline |
Kbi Metal |
SK Bioscience |
Kbi Metal and SK Bioscience Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kbi Metal and SK Bioscience
The main advantage of trading using opposite Kbi Metal and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, SK Bioscience 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 SK Bioscience will offset losses from the drop in SK Bioscience's long position.Kbi Metal vs. Daou Data Corp | Kbi Metal vs. Solution Advanced Technology | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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