Correlation Between SK Bioscience and CKH Food
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and CKH Food 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 CKH Food 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 CKH Food Health, you can compare the effects of market volatilities on SK Bioscience and CKH Food 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 CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and CKH Food.
Diversification Opportunities for SK Bioscience and CKH Food
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 302440 and CKH is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health 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 CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of SK Bioscience i.e., SK Bioscience and CKH Food go up and down completely randomly.
Pair Corralation between SK Bioscience and CKH Food
Assuming the 90 days trading horizon SK Bioscience Co is expected to generate 1.56 times more return on investment than CKH Food. However, SK Bioscience is 1.56 times more volatile than CKH Food Health. It trades about -0.03 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.16 per unit of risk. If you would invest 4,725,000 in SK Bioscience Co on December 2, 2024 and sell it today you would lose (470,000) from holding SK Bioscience Co or give up 9.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SK Bioscience Co vs. CKH Food Health
Performance |
Timeline |
SK Bioscience |
CKH Food Health |
SK Bioscience and CKH Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SK Bioscience and CKH Food
The main advantage of trading using opposite SK Bioscience and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, CKH Food 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 CKH Food will offset losses from the drop in CKH Food's long position.SK Bioscience vs. Grand Korea Leisure | SK Bioscience vs. Sangsangin Investment Securities | SK Bioscience vs. Korean Drug Co | SK Bioscience vs. Golden Bridge Investment |
CKH Food vs. YG Entertainment | CKH Food vs. Bohae Brewery | CKH Food vs. Handok Clean Tech | CKH Food vs. Clean Science co |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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