Correlation Between Homecast CoLtd and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd 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 Homecast CoLtd and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and SK Telecom Co, you can compare the effects of market volatilities on Homecast CoLtd 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 Homecast CoLtd with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and SK Telecom.
Diversification Opportunities for Homecast CoLtd and SK Telecom
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Homecast and 017670 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Homecast CoLtd 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 Homecast CoLtd 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 Homecast CoLtd i.e., Homecast CoLtd and SK Telecom go up and down completely randomly.
Pair Corralation between Homecast CoLtd and SK Telecom
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the SK Telecom. In addition to that, Homecast CoLtd is 3.96 times more volatile than SK Telecom Co. It trades about -0.01 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.06 per unit of volatility. If you would invest 4,171,152 in SK Telecom Co on September 24, 2024 and sell it today you would earn a total of 1,428,848 from holding SK Telecom Co or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. SK Telecom Co
Performance |
| Timeline |
| Homecast CoLtd |
| SK Telecom |
Homecast CoLtd and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and SK Telecom
The main advantage of trading using opposite Homecast CoLtd and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd 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.| Homecast CoLtd vs. Hansol Chemical Co | Homecast CoLtd vs. Shinhan Financial Group | Homecast CoLtd vs. Dongnam Chemical Co | Homecast CoLtd vs. Kukdo Chemical Co |
| SK Telecom vs. Samsung Electronics Co | SK Telecom vs. Samsung Electronics Co | SK Telecom vs. KB Financial Group | SK Telecom vs. Shinhan Financial Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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