Correlation Between Nice Information and SK Holdings
Can any of the company-specific risk be diversified away by investing in both Nice Information and SK Holdings 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 Nice Information and SK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice Information Telecommunication and SK Holdings Co, you can compare the effects of market volatilities on Nice Information and SK Holdings 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 Nice Information with a short position of SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and SK Holdings.
Diversification Opportunities for Nice Information and SK Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nice and 034730 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings and Nice Information 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 Nice Information Telecommunication are associated (or correlated) with SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of Nice Information i.e., Nice Information and SK Holdings go up and down completely randomly.
Pair Corralation between Nice Information and SK Holdings
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the SK Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 4.2 times less risky than SK Holdings. The stock trades about -0.17 of its potential returns per unit of risk. The SK Holdings Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 14,300,000 in SK Holdings Co on July 2, 2024 and sell it today you would earn a total of 1,200,000 from holding SK Holdings Co or generate 8.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nice Information Telecommunica vs. SK Holdings Co
Performance |
Timeline |
Nice Information Tel |
SK Holdings |
Nice Information and SK Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nice Information and SK Holdings
The main advantage of trading using opposite Nice Information and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, SK Holdings 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 Holdings will offset losses from the drop in SK Holdings' long position.Nice Information vs. Korea New Network | Nice Information vs. Dong A Eltek | Nice Information vs. Dreamus Company | Nice Information vs. SK Bioscience Co |
SK Holdings vs. Nice Information Telecommunication | SK Holdings vs. Sejong Telecom | SK Holdings vs. Automobile Pc | SK Holdings vs. Wireless Power Amplifier |
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.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |