Correlation Between GUARDANT HEALTH and SK TELECOM
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH 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 GUARDANT HEALTH and SK TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUARDANT HEALTH CL and SK TELECOM TDADR, you can compare the effects of market volatilities on GUARDANT HEALTH 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 GUARDANT HEALTH with a short position of SK TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and SK TELECOM.
Diversification Opportunities for GUARDANT HEALTH and SK TELECOM
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GUARDANT and KMBA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and SK TELECOM TDADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK TELECOM TDADR and GUARDANT HEALTH 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 GUARDANT HEALTH CL 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 TDADR has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and SK TELECOM go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and SK TELECOM
Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 2.19 times more return on investment than SK TELECOM. However, GUARDANT HEALTH is 2.19 times more volatile than SK TELECOM TDADR. It trades about 0.12 of its potential returns per unit of risk. SK TELECOM TDADR is currently generating about 0.06 per unit of risk. If you would invest 1,618 in GUARDANT HEALTH CL on September 3, 2024 and sell it today you would earn a total of 1,700 from holding GUARDANT HEALTH CL or generate 105.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUARDANT HEALTH CL vs. SK TELECOM TDADR
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| SK TELECOM TDADR |
GUARDANT HEALTH and SK TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and SK TELECOM
The main advantage of trading using opposite GUARDANT HEALTH and SK TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH 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.| GUARDANT HEALTH vs. Thermo Fisher Scientific | GUARDANT HEALTH vs. Danaher | GUARDANT HEALTH vs. Danaher | GUARDANT HEALTH vs. SIEMENS HEALTH ADR050 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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