Correlation Between Cable One and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Cable One 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 Cable One and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and SK Telecom Co, you can compare the effects of market volatilities on Cable One 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 Cable One with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and SK Telecom.
Diversification Opportunities for Cable One and SK Telecom
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cable and SKM is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Cable One 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 Cable One 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 Cable One i.e., Cable One and SK Telecom go up and down completely randomly.
Pair Corralation between Cable One and SK Telecom
Given the investment horizon of 90 days Cable One is expected to under-perform the SK Telecom. In addition to that, Cable One is 2.09 times more volatile than SK Telecom Co. It trades about -0.03 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.04 per unit of volatility. If you would invest 1,872 in SK Telecom Co on August 27, 2024 and sell it today you would earn a total of 406.00 from holding SK Telecom Co or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. SK Telecom Co
Performance |
| Timeline |
| Cable One |
| SK Telecom |
Cable One and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and SK Telecom
The main advantage of trading using opposite Cable One and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One 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.| Cable One vs. Liberty Global PLC | Cable One vs. Liberty Global PLC | Cable One vs. Liberty Broadband Srs | Cable One vs. Shenandoah Telecommunications Co |
| SK Telecom vs. Anterix | SK Telecom vs. Liberty Broadband Corp | SK Telecom vs. Ooma Inc | SK Telecom vs. IDT Corporation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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