Correlation Between SK Telecom and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Ssangyong Materials 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 Ssangyong Materials 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 Ssangyong Materials Corp, you can compare the effects of market volatilities on SK Telecom and Ssangyong Materials 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 Ssangyong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Ssangyong Materials.
Diversification Opportunities for SK Telecom and Ssangyong Materials
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 017670 and Ssangyong is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Ssangyong Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Materials Corp 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 Ssangyong Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Materials Corp has no effect on the direction of SK Telecom i.e., SK Telecom and Ssangyong Materials go up and down completely randomly.
Pair Corralation between SK Telecom and Ssangyong Materials
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.41 times more return on investment than Ssangyong Materials. However, SK Telecom Co is 2.46 times less risky than Ssangyong Materials. It trades about 0.06 of its potential returns per unit of risk. Ssangyong Materials Corp is currently generating about -0.04 per unit of risk. If you would invest 4,851,784 in SK Telecom Co on November 4, 2024 and sell it today you would earn a total of 688,216 from holding SK Telecom Co or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co vs. Ssangyong Materials Corp
Performance |
| Timeline |
| SK Telecom |
| Ssangyong Materials Corp |
SK Telecom and Ssangyong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Ssangyong Materials
The main advantage of trading using opposite SK Telecom and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Ssangyong Materials 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 Ssangyong Materials will offset losses from the drop in Ssangyong Materials' long position.| SK Telecom vs. Innowireless Co | SK Telecom vs. Sempio Foods Co | SK Telecom vs. Husteel | SK Telecom vs. Haitai Confectionery Foods |
| Ssangyong Materials vs. EBEST Investment Securities | Ssangyong Materials vs. Golden Bridge Investment | Ssangyong Materials vs. DB Financial Investment | Ssangyong Materials 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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