Correlation Between Hana Financial and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Hana Financial 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 Hana Financial and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial 7 and SK Telecom Co, you can compare the effects of market volatilities on Hana Financial 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 Hana Financial with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and SK Telecom.
Diversification Opportunities for Hana Financial and SK Telecom
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hana and 017670 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial 7 and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Hana Financial 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 Hana Financial 7 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 Hana Financial i.e., Hana Financial and SK Telecom go up and down completely randomly.
Pair Corralation between Hana Financial and SK Telecom
Assuming the 90 days trading horizon Hana Financial 7 is expected to generate 3.45 times more return on investment than SK Telecom. However, Hana Financial is 3.45 times more volatile than SK Telecom Co. It trades about 0.13 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.02 per unit of risk. If you would invest 1,209,044 in Hana Financial 7 on October 26, 2024 and sell it today you would earn a total of 1,025,956 from holding Hana Financial 7 or generate 84.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial 7 vs. SK Telecom Co
Performance |
| Timeline |
| Hana Financial 7 |
| SK Telecom |
Hana Financial and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and SK Telecom
The main advantage of trading using opposite Hana Financial and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial 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.| Hana Financial vs. Ananti Inc | Hana Financial vs. SS TECH | Hana Financial vs. Vieworks Co | Hana Financial vs. Shinsung Delta Tech |
| SK Telecom vs. Busan Industrial Co | SK Telecom vs. Busan Ind | SK Telecom vs. RPBio Inc | SK Telecom vs. Finebesteel |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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