Correlation Between SK Telecom and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Daebo Magnetic 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 Daebo Magnetic 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 Daebo Magnetic CoLtd, you can compare the effects of market volatilities on SK Telecom and Daebo Magnetic 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 Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Daebo Magnetic.
Diversification Opportunities for SK Telecom and Daebo Magnetic
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 017670 and Daebo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd 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 Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of SK Telecom i.e., SK Telecom and Daebo Magnetic go up and down completely randomly.
Pair Corralation between SK Telecom and Daebo Magnetic
Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.32 times more return on investment than Daebo Magnetic. However, SK Telecom Co is 3.11 times less risky than Daebo Magnetic. It trades about 0.07 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.09 per unit of risk. If you would invest 4,358,600 in SK Telecom Co on September 2, 2024 and sell it today you would earn a total of 1,781,400 from holding SK Telecom Co or generate 40.87% 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. Daebo Magnetic CoLtd
Performance |
| Timeline |
| SK Telecom |
| Daebo Magnetic CoLtd |
SK Telecom and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Daebo Magnetic
The main advantage of trading using opposite SK Telecom and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| SK Telecom vs. AfreecaTV Co | SK Telecom vs. Seegene | SK Telecom vs. SS TECH | SK Telecom vs. Busan Industrial Co |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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