Correlation Between SK Telecom and Dongwon System
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Dongwon System 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 Telecom and Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Telecom Co and Dongwon System, you can compare the effects of market volatilities on SK Telecom and Dongwon System 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 Telecom with a short position of Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Dongwon System.
Diversification Opportunities for SK Telecom and Dongwon System
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between 017670 and Dongwon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and SK Telecom 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 Telecom Co are associated (or correlated) with Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of SK Telecom i.e., SK Telecom and Dongwon System go up and down completely randomly.
Pair Corralation between SK Telecom and Dongwon System
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.35 times more return on investment than Dongwon System. However, SK Telecom Co is 2.88 times less risky than Dongwon System. It trades about 0.06 of its potential returns per unit of risk. Dongwon System is currently generating about 0.02 per unit of risk. If you would invest 4,206,689 in SK Telecom Co on September 25, 2024 and sell it today you would earn a total of 1,463,311 from holding SK Telecom Co or generate 34.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co vs. Dongwon System
Performance |
| Timeline |
| SK Telecom |
| Dongwon System |
SK Telecom and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Dongwon System
The main advantage of trading using opposite SK Telecom and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| SK Telecom vs. Samsung Electronics Co | SK Telecom vs. Samsung Electronics Co | SK Telecom vs. KB Financial Group | SK Telecom vs. Shinhan Financial Group |
| Dongwon System vs. Daejoo Electronic Materials | Dongwon System vs. Hyundai Engineering Plastics | Dongwon System vs. Samsung Publishing Co | Dongwon System vs. Nable Communications |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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