Correlation Between Compagnie Plastic and SK TELECOM
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and SK TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and SK TELECOM TDADR, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of SK TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and SK TELECOM.
Diversification Opportunities for Compagnie Plastic and SK TELECOM
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and KMBA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium 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 Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and SK TELECOM go up and down completely randomly.
Pair Corralation between Compagnie Plastic and SK TELECOM
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 1.53 times more return on investment than SK TELECOM. However, Compagnie Plastic is 1.53 times more volatile than SK TELECOM TDADR. It trades about 0.27 of its potential returns per unit of risk. SK TELECOM TDADR is currently generating about -0.04 per unit of risk. If you would invest 975.00 in Compagnie Plastic Omnium on October 12, 2024 and sell it today you would earn a total of 82.00 from holding Compagnie Plastic Omnium or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. SK TELECOM TDADR
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| SK TELECOM TDADR |
Compagnie Plastic and SK TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and SK TELECOM
The main advantage of trading using opposite Compagnie Plastic and SK TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. MeVis Medical Solutions | Compagnie Plastic vs. PDS Biotechnology Corp | Compagnie Plastic vs. IMAGIN MEDICAL INC | Compagnie Plastic vs. AGF Management Limited |
| SK TELECOM vs. SILICON LABORATOR | SK TELECOM vs. Compagnie Plastic Omnium | SK TELECOM vs. SANOK RUBBER ZY | SK TELECOM vs. The Yokohama Rubber |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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