Correlation Between Lotte Data and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Lotte Data 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 Lotte Data and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Data Communication and SK Telecom Co, you can compare the effects of market volatilities on Lotte Data 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 Lotte Data with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and SK Telecom.
Diversification Opportunities for Lotte Data and SK Telecom
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lotte and 017670 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Lotte Data 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 Lotte Data Communication 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 Lotte Data i.e., Lotte Data and SK Telecom go up and down completely randomly.
Pair Corralation between Lotte Data and SK Telecom
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the SK Telecom. In addition to that, Lotte Data is 2.77 times more volatile than SK Telecom Co. It trades about -0.19 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.0 per unit of volatility. If you would invest 5,730,000 in SK Telecom Co on August 25, 2024 and sell it today you would lose (10,000) from holding SK Telecom Co or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lotte Data Communication vs. SK Telecom Co
Performance |
| Timeline |
| Lotte Data Communication |
| SK Telecom |
Lotte Data and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and SK Telecom
The main advantage of trading using opposite Lotte Data and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data 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.| Lotte Data vs. SCI Information Service | Lotte Data vs. DataSolution | Lotte Data vs. Koryo Credit Information | Lotte Data vs. Seoul Electronics Telecom |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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