Correlation Between SK Holdings and Fine Semitech

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

By analyzing existing cross correlation between SK Holdings Co and Fine Semitech Corp, you can compare the effects of market volatilities on SK Holdings and Fine Semitech 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 Holdings with a short position of Fine Semitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and Fine Semitech.

Diversification Opportunities for SK Holdings and Fine Semitech

0.88

Correlation Coefficient

SK Holdings  Fine Semitech

Very poor diversification

The 3 months correlation between 034730 and Fine is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and Fine Semitech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Semitech Corp and SK Holdings 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 Holdings Co are associated (or correlated) with Fine Semitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Semitech Corp has no effect on the direction of SK Holdings i.e., SK Holdings and Fine Semitech go up and down completely randomly.

Pair Corralation between SK Holdings and Fine Semitech

Assuming the 90 days trading horizon SK Holdings Co is expected to under-perform the Fine Semitech. But the stock apears to be less risky and, when comparing its historical volatility, SK Holdings Co is 1.75 times less risky than Fine Semitech. The stock trades about -0.01 of its potential returns per unit of risk. The Fine Semitech Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,608,257  in Fine Semitech Corp on September 26, 2024 and sell it today you would earn a total of  11,743  from holding Fine Semitech Corp or generate 0.73% return on investment over 90 days.

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

SK Holdings Co  vs.  Fine Semitech Corp

SK Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SK Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Fine Semitech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fine Semitech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SK Holdings and Fine Semitech

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

The idea behind SK Holdings Co and Fine Semitech Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.