Correlation Between SK Telecom and Wireless Power
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on SK Telecom and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Wireless Power.
Diversification Opportunities for SK Telecom and Wireless Power
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 017670 and Wireless is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of SK Telecom i.e., SK Telecom and Wireless Power go up and down completely randomly.
Pair Corralation between SK Telecom and Wireless Power
Assuming the 90 days trading horizon SK Telecom Co is expected to under-perform the Wireless Power. But the stock apears to be less risky and, when comparing its historical volatility, SK Telecom Co is 9.76 times less risky than Wireless Power. The stock trades about -0.07 of its potential returns per unit of risk. The Wireless Power Amplifier is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 295,500 in Wireless Power Amplifier on November 3, 2024 and sell it today you would earn a total of 178,500 from holding Wireless Power Amplifier or generate 60.41% 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. Wireless Power Amplifier
Performance |
| Timeline |
| SK Telecom |
| Wireless Power Amplifier |
SK Telecom and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Wireless Power
The main advantage of trading using opposite SK Telecom and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| SK Telecom vs. Innowireless Co | SK Telecom vs. Sempio Foods Co | SK Telecom vs. Husteel | SK Telecom vs. Haitai Confectionery Foods |
| Wireless Power vs. Golden Bridge Investment | Wireless Power vs. Korea Investment Holdings | Wireless Power vs. Ssangyong Information Communication | Wireless Power 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |