Correlation Between Robostar CoLtd and SK Chemicals

Can any of the company-specific risk be diversified away by investing in both Robostar CoLtd and SK Chemicals 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 Robostar CoLtd and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Robostar CoLtd and SK Chemicals Co, you can compare the effects of market volatilities on Robostar CoLtd and SK Chemicals 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 Robostar CoLtd with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robostar CoLtd and SK Chemicals.

Diversification Opportunities for Robostar CoLtd and SK Chemicals

-0.3

Correlation Coefficient

Robostar CoLtd  SK Chemicals

Very good diversification

The 3 months correlation between Robostar and 285130 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Robostar CoLtd and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Robostar CoLtd 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 Robostar CoLtd are associated (or correlated) with SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Robostar CoLtd i.e., Robostar CoLtd and SK Chemicals go up and down completely randomly.

Pair Corralation between Robostar CoLtd and SK Chemicals

Assuming the 90 days trading horizon Robostar CoLtd is expected to generate 1.71 times more return on investment than SK Chemicals. However, Robostar CoLtd is 1.71 times more volatile than SK Chemicals Co. It trades about 0.16 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.11 per unit of risk. If you would invest  2,090,000  in Robostar CoLtd on October 26, 2024 and sell it today you would earn a total of  875,000  from holding Robostar CoLtd or generate 41.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Robostar CoLtd  vs.  SK Chemicals Co

Robostar CoLtd

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Robostar CoLtd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Robostar CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

SK Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SK Chemicals Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Robostar CoLtd and SK Chemicals

The main advantage of trading using opposite Robostar CoLtd and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robostar CoLtd position performs unexpectedly, SK Chemicals 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 Chemicals will offset losses from the drop in SK Chemicals' long position.

The idea behind Robostar CoLtd and SK Chemicals Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.