Correlation Between Daewoo SBI and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI 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 Daewoo SBI and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and SK Telecom Co, you can compare the effects of market volatilities on Daewoo SBI 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 Daewoo SBI with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and SK Telecom.
Diversification Opportunities for Daewoo SBI and SK Telecom
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daewoo and 017670 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Daewoo SBI 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 Daewoo SBI SPAC 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 Daewoo SBI i.e., Daewoo SBI and SK Telecom go up and down completely randomly.
Pair Corralation between Daewoo SBI and SK Telecom
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the SK Telecom. In addition to that, Daewoo SBI is 1.86 times more volatile than SK Telecom Co. It trades about -0.07 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.08 per unit of volatility. If you would invest 4,623,669 in SK Telecom Co on August 25, 2024 and sell it today you would earn a total of 1,096,331 from holding SK Telecom Co or generate 23.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. SK Telecom Co
Performance |
| Timeline |
| Daewoo SBI SPAC |
| SK Telecom |
Daewoo SBI and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and SK Telecom
The main advantage of trading using opposite Daewoo SBI and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI 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.| Daewoo SBI vs. Deutsch Motors | Daewoo SBI vs. Hanjinkal | Daewoo SBI vs. Busan Industrial Co | Daewoo SBI vs. Busan Ind |
| SK Telecom vs. Daewon Media Co | SK Telecom vs. Korea Investment Holdings | SK Telecom vs. Barunson Entertainment Arts | SK Telecom vs. Daol Investment Securities |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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