Correlation Between SBI Investment and SK Telecom
Can any of the company-specific risk be diversified away by investing in both SBI Investment and SK Telecom 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 SBI Investment and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and SK Telecom Co, you can compare the effects of market volatilities on SBI Investment and SK Telecom 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 SBI Investment with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and SK Telecom.
Diversification Opportunities for SBI Investment and SK Telecom
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and 017670 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and SBI Investment 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 SBI Investment KOREA are associated (or correlated) with SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom has no effect on the direction of SBI Investment i.e., SBI Investment and SK Telecom go up and down completely randomly.
Pair Corralation between SBI Investment and SK Telecom
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 2.66 times more return on investment than SK Telecom. However, SBI Investment is 2.66 times more volatile than SK Telecom Co. It trades about 0.16 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.08 per unit of risk. If you would invest 65,800 in SBI Investment KOREA on August 29, 2024 and sell it today you would earn a total of 6,600 from holding SBI Investment KOREA or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. SK Telecom Co
Performance |
| Timeline |
| SBI Investment KOREA |
| SK Telecom |
SBI Investment and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and SK Telecom
The main advantage of trading using opposite SBI Investment and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, SK Telecom 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 SK Telecom will offset losses from the drop in SK Telecom's long position.| SBI Investment vs. Daekyung Machinery Engineering | SBI Investment vs. PlayD Co | SBI Investment vs. Playgram Co | SBI Investment vs. Camus Engineering Construction |
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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 Stocks Directory module to find actively traded stocks across global markets.
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