Correlation Between Seoul Electronics and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics 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 Seoul Electronics and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and SK Telecom Co, you can compare the effects of market volatilities on Seoul Electronics 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 Seoul Electronics with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and SK Telecom.
Diversification Opportunities for Seoul Electronics and SK Telecom
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seoul and 017670 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Seoul Electronics 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 Seoul Electronics Telecom 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 Seoul Electronics i.e., Seoul Electronics and SK Telecom go up and down completely randomly.
Pair Corralation between Seoul Electronics and SK Telecom
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the SK Telecom. In addition to that, Seoul Electronics is 1.25 times more volatile than SK Telecom Co. It trades about -0.09 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.07 per unit of volatility. If you would invest 5,730,000 in SK Telecom Co on August 29, 2024 and sell it today you would earn a total of 100,000 from holding SK Telecom Co or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. SK Telecom Co
Performance |
| Timeline |
| Seoul Electronics Telecom |
| SK Telecom |
Seoul Electronics and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and SK Telecom
The main advantage of trading using opposite Seoul Electronics and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics 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.| Seoul Electronics vs. Samsung Electronics Co | Seoul Electronics vs. Samsung Electronics Co | Seoul Electronics vs. KB Financial Group | Seoul Electronics vs. Shinhan Financial Group |
| SK Telecom vs. KyungIn Electronics Co | SK Telecom vs. Sangshin Electronics Co | SK Telecom vs. Daechang Steel Co | SK Telecom vs. Derkwoo Electronics Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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