Correlation Between DRB Industrial and SK Telecom
Can any of the company-specific risk be diversified away by investing in both DRB Industrial 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 DRB Industrial and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRB Industrial Co and SK Telecom Co, you can compare the effects of market volatilities on DRB Industrial 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 DRB Industrial with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRB Industrial and SK Telecom.
Diversification Opportunities for DRB Industrial and SK Telecom
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between DRB and 017670 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding DRB Industrial Co and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and DRB Industrial 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 DRB Industrial Co 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 DRB Industrial i.e., DRB Industrial and SK Telecom go up and down completely randomly.
Pair Corralation between DRB Industrial and SK Telecom
Assuming the 90 days trading horizon DRB Industrial Co is expected to generate 2.91 times more return on investment than SK Telecom. However, DRB Industrial is 2.91 times more volatile than SK Telecom Co. It trades about 0.03 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.06 per unit of risk. If you would invest 618,772 in DRB Industrial Co on October 31, 2024 and sell it today you would earn a total of 141,228 from holding DRB Industrial Co or generate 22.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRB Industrial Co vs. SK Telecom Co
Performance |
| Timeline |
| DRB Industrial |
| SK Telecom |
DRB Industrial and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRB Industrial and SK Telecom
The main advantage of trading using opposite DRB Industrial and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRB Industrial 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.| DRB Industrial vs. Samlip General Foods | DRB Industrial vs. Anam Electronics Co | DRB Industrial vs. PJ Electronics Co | DRB Industrial vs. UJU Electronics Co |
| SK Telecom vs. Daishin Information Communications | SK Telecom vs. Ssangyong Information Communication | SK Telecom vs. Insung Information Co | SK Telecom vs. Moadata 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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