Correlation Between Hankuk Steel and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel 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 Hankuk Steel and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankuk Steel Wire and SK Telecom Co, you can compare the effects of market volatilities on Hankuk Steel 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 Hankuk Steel with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and SK Telecom.
Diversification Opportunities for Hankuk Steel and SK Telecom
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hankuk and 017670 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Hankuk Steel 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 Hankuk Steel Wire 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 Hankuk Steel i.e., Hankuk Steel and SK Telecom go up and down completely randomly.
Pair Corralation between Hankuk Steel and SK Telecom
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 1.79 times more return on investment than SK Telecom. However, Hankuk Steel is 1.79 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 -0.04 per unit of risk. If you would invest 281,000 in Hankuk Steel Wire on August 28, 2024 and sell it today you would earn a total of 16,000 from holding Hankuk Steel Wire or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. SK Telecom Co
Performance |
| Timeline |
| Hankuk Steel Wire |
| SK Telecom |
Hankuk Steel and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and SK Telecom
The main advantage of trading using opposite Hankuk Steel and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel 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.| Hankuk Steel vs. Coloray International Investment | Hankuk Steel vs. Chorokbaem Healthcare Co | Hankuk Steel vs. Sewoon Medical Co | Hankuk Steel vs. LG Household Healthcare |
| SK Telecom vs. AfreecaTV Co | SK Telecom vs. SS TECH | SK Telecom vs. Busan Industrial Co | SK Telecom vs. Busan Ind |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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