Correlation Between Korea Information and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Korea Information and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Engineering and SK Telecom Co, you can compare the effects of market volatilities on Korea Information 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 Korea Information with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and SK Telecom.
Diversification Opportunities for Korea Information and SK Telecom
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and 017670 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Korea Information 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 Korea Information Engineering 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 Korea Information i.e., Korea Information and SK Telecom go up and down completely randomly.
Pair Corralation between Korea Information and SK Telecom
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the SK Telecom. In addition to that, Korea Information is 1.29 times more volatile than SK Telecom Co. It trades about -0.11 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.14 per unit of volatility. If you would invest 4,995,276 in SK Telecom Co on September 1, 2024 and sell it today you would earn a total of 1,144,724 from holding SK Telecom Co or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. SK Telecom Co
Performance |
| Timeline |
| Korea Information |
| SK Telecom |
Korea Information and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and SK Telecom
The main advantage of trading using opposite Korea Information and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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.| Korea Information vs. NICE Information Service | Korea Information vs. Korea Shipbuilding Offshore | Korea Information vs. National Plastic Co | Korea Information vs. Moadata Co |
| SK Telecom vs. AurosTechnology | SK Telecom vs. Eugene Technology CoLtd | SK Telecom vs. Dong A Steel Technology | SK Telecom vs. Playgram 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |