Correlation Between Sk Biopharmaceutica and SBI Investment

Can any of the company-specific risk be diversified away by investing in both Sk Biopharmaceutica and SBI Investment 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 Biopharmaceutica and SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sk Biopharmaceuticals Co and SBI Investment KOREA, you can compare the effects of market volatilities on Sk Biopharmaceutica and SBI Investment 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 Biopharmaceutica with a short position of SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sk Biopharmaceutica and SBI Investment.

Diversification Opportunities for Sk Biopharmaceutica and SBI Investment

-0.49

Correlation Coefficient

Sk Biopharmaceutica  SBI Investment

Very good diversification

The 3 months correlation between 326030 and SBI is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sk Biopharmaceuticals Co and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA and Sk Biopharmaceutica 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 Biopharmaceuticals Co are associated (or correlated) with SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Sk Biopharmaceutica i.e., Sk Biopharmaceutica and SBI Investment go up and down completely randomly.

Pair Corralation between Sk Biopharmaceutica and SBI Investment

Assuming the 90 days trading horizon Sk Biopharmaceuticals Co is expected to generate 1.04 times more return on investment than SBI Investment. However, Sk Biopharmaceutica is 1.04 times more volatile than SBI Investment KOREA. It trades about 0.05 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.02 per unit of risk. If you would invest  7,410,000  in Sk Biopharmaceuticals Co on October 3, 2024 and sell it today you would earn a total of  3,700,000  from holding Sk Biopharmaceuticals Co or generate 49.93% return on investment over 90 days.

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

Sk Biopharmaceuticals Co  vs.  SBI Investment KOREA

Sk Biopharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

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

SBI Investment KOREA

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Sk Biopharmaceutica and SBI Investment

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

The idea behind Sk Biopharmaceuticals Co and SBI Investment KOREA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.