Correlation Between SK Bioscience and Ilji Technology

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

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

Diversification Opportunities for SK Bioscience and Ilji Technology

0.62

Correlation Coefficient

SK Bioscience  Ilji Technology

Poor diversification

The 3 months correlation between 302440 and Ilji is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and SK Bioscience 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 Bioscience Co are associated (or correlated) with Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of SK Bioscience i.e., SK Bioscience and Ilji Technology go up and down completely randomly.

Pair Corralation between SK Bioscience and Ilji Technology

Assuming the 90 days trading horizon SK Bioscience Co is expected to generate 1.89 times more return on investment than Ilji Technology. However, SK Bioscience is 1.89 times more volatile than Ilji Technology Co. It trades about 0.03 of its potential returns per unit of risk. Ilji Technology Co is currently generating about -0.18 per unit of risk. If you would invest  5,620,000  in SK Bioscience Co on September 14, 2024 and sell it today you would earn a total of  110,000  from holding SK Bioscience Co or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SK Bioscience Co  vs.  Ilji Technology Co

SK Bioscience

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SK Bioscience Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SK Bioscience is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ilji Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ilji Technology 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SK Bioscience and Ilji Technology

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

The idea behind SK Bioscience Co and Ilji Technology 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.