Correlation Between LIV Capital and SK Growth

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

By analyzing existing cross correlation between LIV Capital Acquisition and SK Growth Opportunities, you can compare the effects of market volatilities on LIV Capital and SK Growth 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 LIV Capital with a short position of SK Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIV Capital and SK Growth.

Diversification Opportunities for LIV Capital and SK Growth

0.91

Correlation Coefficient

LIV Capital  SK Growth

Almost no diversification

The 3 months correlation between LIV and SKGR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding LIV Capital Acquisition and SK Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Growth Opportunities and LIV Capital 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 LIV Capital Acquisition are associated (or correlated) with SK Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Growth Opportunities has no effect on the direction of LIV Capital i.e., LIV Capital and SK Growth go up and down completely randomly.

Pair Corralation between LIV Capital and SK Growth

If you would invest  1,150  in SK Growth Opportunities on September 18, 2024 and sell it today you would earn a total of  13.00  from holding SK Growth Opportunities or generate 1.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	5.0%
Values	Daily Returns

LIV Capital Acquisition  vs.  SK Growth Opportunities

LIV Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIV Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LIV Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SK Growth Opportunities

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SK Growth Opportunities are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, SK Growth is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with LIV Capital and SK Growth

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

The idea behind LIV Capital Acquisition and SK Growth Opportunities 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.