Correlation Between Globalstar and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Globalstar 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 Globalstar and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalstar and SK Telecom Co, you can compare the effects of market volatilities on Globalstar 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 Globalstar with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalstar and SK Telecom.
Diversification Opportunities for Globalstar and SK Telecom
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globalstar and SKM is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Globalstar and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Globalstar 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 Globalstar 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 Globalstar i.e., Globalstar and SK Telecom go up and down completely randomly.
Pair Corralation between Globalstar and SK Telecom
Given the investment horizon of 90 days Globalstar is expected to generate 4.14 times more return on investment than SK Telecom. However, Globalstar is 4.14 times more volatile than SK Telecom Co. It trades about 0.03 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.04 per unit of risk. If you would invest 155.00 in Globalstar on August 27, 2024 and sell it today you would earn a total of 24.00 from holding Globalstar or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalstar vs. SK Telecom Co
Performance |
| Timeline |
| Globalstar |
| SK Telecom |
Globalstar and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalstar and SK Telecom
The main advantage of trading using opposite Globalstar and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalstar 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.| Globalstar vs. Iridium Communications | Globalstar vs. Lumen Technologies | Globalstar vs. InterDigital | Globalstar vs. Cogent Communications Group |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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