Correlation Between SK Telecom and Nice Information
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Nice Information 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 Nice Information 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 Nice Information Telecommunication, you can compare the effects of market volatilities on SK Telecom and Nice Information 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 Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Nice Information.
Diversification Opportunities for SK Telecom and Nice Information
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 017670 and Nice is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel 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 Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of SK Telecom i.e., SK Telecom and Nice Information go up and down completely randomly.
Pair Corralation between SK Telecom and Nice Information
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 1.79 times more return on investment than Nice Information. However, SK Telecom is 1.79 times more volatile than Nice Information Telecommunication. It trades about 0.08 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.16 per unit of risk. If you would invest 5,730,000 in SK Telecom Co on August 29, 2024 and sell it today you would earn a total of 100,000 from holding SK Telecom Co or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co vs. Nice Information Telecommunica
Performance |
| Timeline |
| SK Telecom |
| Nice Information Tel |
SK Telecom and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Nice Information
The main advantage of trading using opposite SK Telecom and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| SK Telecom vs. Barunson Entertainment Arts | SK Telecom vs. Derkwoo Electronics Co | SK Telecom vs. Tamul Multimedia Co | SK Telecom vs. SM Entertainment Co |
| Nice Information vs. Korea Real Estate | Nice Information vs. Korea Ratings Co | Nice Information vs. IQuest Co | Nice Information vs. Wonbang Tech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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