Correlation Between SK Bioscience and OliX PharmaceuticalsI

Can any of the company-specific risk be diversified away by investing in both SK Bioscience and OliX PharmaceuticalsI 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 OliX PharmaceuticalsI 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 OliX PharmaceuticalsInc, you can compare the effects of market volatilities on SK Bioscience and OliX PharmaceuticalsI 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 OliX PharmaceuticalsI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and OliX PharmaceuticalsI.

Diversification Opportunities for SK Bioscience and OliX PharmaceuticalsI

0.27

Correlation Coefficient

SK Bioscience  OliX PharmaceuticalsI

Modest diversification

The 3 months correlation between 302440 and OliX is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and OliX PharmaceuticalsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OliX PharmaceuticalsInc 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 OliX PharmaceuticalsI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OliX PharmaceuticalsInc has no effect on the direction of SK Bioscience i.e., SK Bioscience and OliX PharmaceuticalsI go up and down completely randomly.

Pair Corralation between SK Bioscience and OliX PharmaceuticalsI

Assuming the 90 days trading horizon SK Bioscience Co is expected to generate 0.89 times more return on investment than OliX PharmaceuticalsI. However, SK Bioscience Co is 1.12 times less risky than OliX PharmaceuticalsI. It trades about 0.21 of its potential returns per unit of risk. OliX PharmaceuticalsInc is currently generating about 0.04 per unit of risk. If you would invest  4,630,000  in SK Bioscience Co on September 20, 2024 and sell it today you would earn a total of  1,150,000  from holding SK Bioscience Co or generate 24.84% return on investment over 90 days.

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

SK Bioscience Co  vs.  OliX PharmaceuticalsInc

SK Bioscience

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SK Bioscience Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SK Bioscience may actually be approaching a critical reversion point that can send shares even higher in January 2025.

OliX PharmaceuticalsInc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OliX PharmaceuticalsInc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, OliX PharmaceuticalsI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SK Bioscience and OliX PharmaceuticalsI

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

The idea behind SK Bioscience Co and OliX PharmaceuticalsInc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.