Correlation Between SK Telecom and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both SK Telecom and KCC Engineering 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 KCC Engineering 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 KCC Engineering Construction, you can compare the effects of market volatilities on SK Telecom and KCC Engineering 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 KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and KCC Engineering.
Diversification Opportunities for SK Telecom and KCC Engineering
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between 017670 and KCC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons 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 KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of SK Telecom i.e., SK Telecom and KCC Engineering go up and down completely randomly.
Pair Corralation between SK Telecom and KCC Engineering
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 1.24 times more return on investment than KCC Engineering. However, SK Telecom is 1.24 times more volatile than KCC Engineering Construction. It trades about -0.17 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.32 per unit of risk. If you would invest 5,680,000 in SK Telecom Co on October 25, 2024 and sell it today you would lose (190,000) from holding SK Telecom Co or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
SK Telecom Co vs. KCC Engineering Construction
Performance |
| Timeline |
| SK Telecom |
| KCC Engineering Cons |
SK Telecom and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and KCC Engineering
The main advantage of trading using opposite SK Telecom and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| SK Telecom vs. LG Household Healthcare | SK Telecom vs. Hansol Homedeco Co | SK Telecom vs. Hanjin Transportation Co | SK Telecom vs. Kukil Metal Co |
| KCC Engineering vs. SK Telecom Co | KCC Engineering vs. Digital Power Communications | KCC Engineering vs. PJ Metal Co | KCC Engineering vs. Duksan Hi Metal |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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