Correlation Between Coloray International and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Coloray International 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 Coloray International and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and SK Telecom Co, you can compare the effects of market volatilities on Coloray International 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 Coloray International with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and SK Telecom.
Diversification Opportunities for Coloray International and SK Telecom
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coloray and 017670 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Coloray International 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 Coloray International Investment 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 Coloray International i.e., Coloray International and SK Telecom go up and down completely randomly.
Pair Corralation between Coloray International and SK Telecom
Assuming the 90 days trading horizon Coloray International Investment is expected to under-perform the SK Telecom. In addition to that, Coloray International is 2.58 times more volatile than SK Telecom Co. It trades about -0.14 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. SK Telecom Co
Performance |
| Timeline |
| Coloray International |
| SK Telecom |
Coloray International and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and SK Telecom
The main advantage of trading using opposite Coloray International and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International 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.| Coloray International vs. Taeyang Metal Industrial | Coloray International vs. Haitai Confectionery Foods | Coloray International vs. Namhwa Industrial Co | Coloray International vs. Seoyon Topmetal Co |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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