Correlation Between SK Telecom and DeviceENGCOLtd
Can any of the company-specific risk be diversified away by investing in both SK Telecom and DeviceENGCOLtd 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 DeviceENGCOLtd 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 DeviceENGCOLtd, you can compare the effects of market volatilities on SK Telecom and DeviceENGCOLtd 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 DeviceENGCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and DeviceENGCOLtd.
Diversification Opportunities for SK Telecom and DeviceENGCOLtd
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between 017670 and DeviceENGCOLtd is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and DeviceENGCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeviceENGCOLtd 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 DeviceENGCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeviceENGCOLtd has no effect on the direction of SK Telecom i.e., SK Telecom and DeviceENGCOLtd go up and down completely randomly.
Pair Corralation between SK Telecom and DeviceENGCOLtd
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.64 times more return on investment than DeviceENGCOLtd. However, SK Telecom Co is 1.56 times less risky than DeviceENGCOLtd. It trades about 0.13 of its potential returns per unit of risk. DeviceENGCOLtd is currently generating about -0.11 per unit of risk. If you would invest 4,975,877 in SK Telecom Co on September 3, 2024 and sell it today you would earn a total of 1,164,123 from holding SK Telecom Co or generate 23.4% 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. DeviceENGCOLtd
Performance |
| Timeline |
| SK Telecom |
| DeviceENGCOLtd |
SK Telecom and DeviceENGCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and DeviceENGCOLtd
The main advantage of trading using opposite SK Telecom and DeviceENGCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, DeviceENGCOLtd 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 DeviceENGCOLtd will offset losses from the drop in DeviceENGCOLtd's long position.| SK Telecom vs. Green Cross Medical | SK Telecom vs. LG Electronics Pfd | SK Telecom vs. Samji Electronics Co | SK Telecom vs. Anam Electronics Co |
| DeviceENGCOLtd vs. SK Telecom Co | DeviceENGCOLtd vs. Homecast CoLtd | DeviceENGCOLtd vs. Shin Steel Co | DeviceENGCOLtd vs. Hyundai Home Shopping |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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