Correlation Between Allegheny Technologies and SK TELECOM
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies 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 Allegheny Technologies and SK TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegheny Technologies Incorporated and SK TELECOM TDADR, you can compare the effects of market volatilities on Allegheny Technologies 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 Allegheny Technologies with a short position of SK TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and SK TELECOM.
Diversification Opportunities for Allegheny Technologies and SK TELECOM
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allegheny and KMBA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo 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 Allegheny Technologies 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 Allegheny Technologies Incorporated 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 Allegheny Technologies i.e., Allegheny Technologies and SK TELECOM go up and down completely randomly.
Pair Corralation between Allegheny Technologies and SK TELECOM
Assuming the 90 days trading horizon Allegheny Technologies Incorporated is expected to generate 1.46 times more return on investment than SK TELECOM. However, Allegheny Technologies is 1.46 times more volatile than SK TELECOM TDADR. It trades about 0.08 of its potential returns per unit of risk. SK TELECOM TDADR is currently generating about 0.01 per unit of risk. If you would invest 5,406 in Allegheny Technologies Incorporated on November 3, 2024 and sell it today you would earn a total of 162.00 from holding Allegheny Technologies Incorporated or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. SK TELECOM TDADR
Performance |
| Timeline |
| Allegheny Technologies |
| SK TELECOM TDADR |
Allegheny Technologies and SK TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and SK TELECOM
The main advantage of trading using opposite Allegheny Technologies and SK TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies 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.| Allegheny Technologies vs. SCIENCE IN SPORT | Allegheny Technologies vs. SOEDER SPORTFISKE AB | Allegheny Technologies vs. PLAY2CHILL SA ZY | Allegheny Technologies vs. LG Display Co |
| SK TELECOM vs. SIVERS SEMICONDUCTORS AB | SK TELECOM vs. NorAm Drilling AS | SK TELECOM vs. Volkswagen AG | SK TELECOM vs. Darden Restaurants |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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