Correlation Between SK Telecom and Dongyang
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Dongyang 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 Dongyang 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 Dongyang EP, you can compare the effects of market volatilities on SK Telecom and Dongyang 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 Dongyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Dongyang.
Diversification Opportunities for SK Telecom and Dongyang
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between 017670 and Dongyang is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Dongyang EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongyang EP 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 Dongyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongyang EP has no effect on the direction of SK Telecom i.e., SK Telecom and Dongyang go up and down completely randomly.
Pair Corralation between SK Telecom and Dongyang
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.96 times more return on investment than Dongyang. However, SK Telecom Co is 1.04 times less risky than Dongyang. It trades about 0.16 of its potential returns per unit of risk. Dongyang EP is currently generating about 0.02 per unit of risk. If you would invest 5,441,007 in SK Telecom Co on September 2, 2024 and sell it today you would earn a total of 698,993 from holding SK Telecom Co or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
SK Telecom Co vs. Dongyang EP
Performance |
| Timeline |
| SK Telecom |
| Dongyang EP |
SK Telecom and Dongyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Dongyang
The main advantage of trading using opposite SK Telecom and Dongyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Dongyang 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 Dongyang will offset losses from the drop in Dongyang's long position.| SK Telecom vs. AfreecaTV Co | SK Telecom vs. Seegene | SK Telecom vs. SS TECH | SK Telecom vs. Busan Industrial Co |
| Dongyang vs. Digital Power Communications | Dongyang vs. Lotte Data Communication | Dongyang vs. Inzi Display CoLtd | Dongyang 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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