Correlation Between SK Telecom and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Jeong Moon 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 Jeong Moon 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 Jeong Moon Information, you can compare the effects of market volatilities on SK Telecom and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Jeong Moon.
Diversification Opportunities for SK Telecom and Jeong Moon
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between 017670 and Jeong is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of SK Telecom i.e., SK Telecom and Jeong Moon go up and down completely randomly.
Pair Corralation between SK Telecom and Jeong Moon
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 1.02 times more return on investment than Jeong Moon. However, SK Telecom is 1.02 times more volatile than Jeong Moon Information. It trades about 0.25 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.24 per unit of risk. If you would invest 5,670,000 in SK Telecom Co on September 1, 2024 and sell it today you would earn a total of 470,000 from holding SK Telecom Co or generate 8.29% 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. Jeong Moon Information
Performance |
| Timeline |
| SK Telecom |
| Jeong Moon Information |
SK Telecom and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Jeong Moon
The main advantage of trading using opposite SK Telecom and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| SK Telecom vs. AurosTechnology | SK Telecom vs. Eugene Technology CoLtd | SK Telecom vs. Dong A Steel Technology | SK Telecom vs. Playgram Co |
| Jeong Moon vs. Dongsin Engineering Construction | Jeong Moon vs. Doosan Fuel Cell | Jeong Moon vs. Daishin Balance 1 | Jeong Moon vs. Total Soft Bank |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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