Correlation Between YG Entertainment and SK Telecom
Can any of the company-specific risk be diversified away by investing in both YG Entertainment 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 YG Entertainment and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and SK Telecom Co, you can compare the effects of market volatilities on YG Entertainment 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 YG Entertainment with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and SK Telecom.
Diversification Opportunities for YG Entertainment and SK Telecom
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 122870 and 017670 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and YG Entertainment 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 YG Entertainment 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 YG Entertainment i.e., YG Entertainment and SK Telecom go up and down completely randomly.
Pair Corralation between YG Entertainment and SK Telecom
Assuming the 90 days trading horizon YG Entertainment is expected to generate 1.25 times less return on investment than SK Telecom. In addition to that, YG Entertainment is 2.87 times more volatile than SK Telecom Co. It trades about 0.02 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 4,301,825 in SK Telecom Co on September 14, 2024 and sell it today you would earn a total of 1,348,175 from holding SK Telecom Co or generate 31.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. SK Telecom Co
Performance |
| Timeline |
| YG Entertainment |
| SK Telecom |
YG Entertainment and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and SK Telecom
The main advantage of trading using opposite YG Entertainment and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment 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.| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment Co |
| SK Telecom vs. YG Entertainment | SK Telecom vs. JYP Entertainment | SK Telecom vs. Cube Entertainment | SK Telecom vs. FNC Entertainment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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