Correlation Between SK Telecom and Derkwoo Electronics
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Derkwoo Electronics 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 Derkwoo Electronics 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 Derkwoo Electronics Co, you can compare the effects of market volatilities on SK Telecom and Derkwoo Electronics 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 Derkwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Derkwoo Electronics.
Diversification Opportunities for SK Telecom and Derkwoo Electronics
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 017670 and Derkwoo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Derkwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derkwoo Electronics 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 Derkwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derkwoo Electronics has no effect on the direction of SK Telecom i.e., SK Telecom and Derkwoo Electronics go up and down completely randomly.
Pair Corralation between SK Telecom and Derkwoo Electronics
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.34 times more return on investment than Derkwoo Electronics. However, SK Telecom Co is 2.93 times less risky than Derkwoo Electronics. It trades about 0.09 of its potential returns per unit of risk. Derkwoo Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 4,143,708 in SK Telecom Co on August 28, 2024 and sell it today you would earn a total of 1,536,292 from holding SK Telecom Co or generate 37.08% 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. Derkwoo Electronics Co
Performance |
| Timeline |
| SK Telecom |
| Derkwoo Electronics |
SK Telecom and Derkwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Derkwoo Electronics
The main advantage of trading using opposite SK Telecom and Derkwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Derkwoo Electronics 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 Derkwoo Electronics will offset losses from the drop in Derkwoo Electronics' 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 |
| Derkwoo Electronics vs. Samsung Electronics Co | Derkwoo Electronics vs. Samsung Electronics Co | Derkwoo Electronics vs. LG Energy Solution | Derkwoo Electronics vs. SK Hynix |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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