Correlation Between SK Chemicals and Robostar CoLtd
Can any of the company-specific risk be diversified away by investing in both SK Chemicals and Robostar CoLtd 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 Chemicals and Robostar CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Chemicals Co and Robostar CoLtd, you can compare the effects of market volatilities on SK Chemicals and Robostar CoLtd 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 Chemicals with a short position of Robostar CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Robostar CoLtd.
Diversification Opportunities for SK Chemicals and Robostar CoLtd
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 285130 and Robostar is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Robostar CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robostar CoLtd and SK Chemicals 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 Chemicals Co are associated (or correlated) with Robostar CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robostar CoLtd has no effect on the direction of SK Chemicals i.e., SK Chemicals and Robostar CoLtd go up and down completely randomly.
Pair Corralation between SK Chemicals and Robostar CoLtd
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Robostar CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, SK Chemicals Co is 1.64 times less risky than Robostar CoLtd. The stock trades about -0.09 of its potential returns per unit of risk. The Robostar CoLtd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,120,000 in Robostar CoLtd on October 23, 2024 and sell it today you would earn a total of 750,000 from holding Robostar CoLtd or generate 35.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
SK Chemicals Co vs. Robostar CoLtd
Performance |
Timeline |
SK Chemicals |
Robostar CoLtd |
SK Chemicals and Robostar CoLtd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SK Chemicals and Robostar CoLtd
The main advantage of trading using opposite SK Chemicals and Robostar CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals position performs unexpectedly, Robostar CoLtd 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 Robostar CoLtd will offset losses from the drop in Robostar CoLtd's long position.SK Chemicals vs. Solus Advanced Materials | SK Chemicals vs. LAKE MATERIALS LTD | SK Chemicals vs. LS Materials | SK Chemicals vs. Samyang Foods Co |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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