Correlation Between Sungmoon Electronics and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and SK Telecom 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 Sungmoon Electronics and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungmoon Electronics Co and SK Telecom Co, you can compare the effects of market volatilities on Sungmoon Electronics and SK Telecom 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 Sungmoon Electronics with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and SK Telecom.
Diversification Opportunities for Sungmoon Electronics and SK Telecom
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungmoon and 017670 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Sungmoon Electronics 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 Sungmoon Electronics Co are associated (or correlated) with SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and SK Telecom go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and SK Telecom
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to under-perform the SK Telecom. In addition to that, Sungmoon Electronics is 3.7 times more volatile than SK Telecom Co. It trades about -0.02 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.09 per unit of volatility. If you would invest 4,143,708 in SK Telecom Co on August 28, 2024 and sell it today you would earn a total of 1,536,292 from holding SK Telecom Co or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. SK Telecom Co
Performance |
| Timeline |
| Sungmoon Electronics |
| SK Telecom |
Sungmoon Electronics and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and SK Telecom
The main advantage of trading using opposite Sungmoon Electronics and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, SK Telecom 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 Telecom will offset losses from the drop in SK Telecom's long position.| Sungmoon Electronics vs. Samlip General Foods | Sungmoon Electronics vs. Korea Alcohol Industrial | Sungmoon Electronics vs. Jeong Moon Information | Sungmoon Electronics vs. Moadata Co |
| SK Telecom vs. Barunson Entertainment Arts | SK Telecom vs. Derkwoo Electronics Co | SK Telecom vs. Tamul Multimedia Co | SK Telecom vs. SM Entertainment 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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