Correlation Between SK TELECOM and JD
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and JD 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 SK TELECOM and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK TELECOM TDADR and JD Inc, you can compare the effects of market volatilities on SK TELECOM and JD 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 SK TELECOM with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and JD.
Diversification Opportunities for SK TELECOM and JD
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between KMBA and JD is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and SK TELECOM 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 SK TELECOM TDADR are associated (or correlated) with JD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Inc has no effect on the direction of SK TELECOM i.e., SK TELECOM and JD go up and down completely randomly.
Pair Corralation between SK TELECOM and JD
Assuming the 90 days trading horizon SK TELECOM is expected to generate 2.13 times less return on investment than JD. But when comparing it to its historical volatility, SK TELECOM TDADR is 1.59 times less risky than JD. It trades about 0.11 of its potential returns per unit of risk. JD Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,168 in JD Inc on September 5, 2024 and sell it today you would earn a total of 592.00 from holding JD Inc or generate 50.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK TELECOM TDADR vs. JD Inc
Performance |
| Timeline |
| SK TELECOM TDADR |
| JD Inc |
SK TELECOM and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and JD
The main advantage of trading using opposite SK TELECOM and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, JD 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 JD will offset losses from the drop in JD's long position.The idea behind SK TELECOM TDADR and JD Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| JD vs. SK TELECOM TDADR | JD vs. Chunghwa Telecom Co | JD vs. Zijin Mining Group | JD vs. Cogent Communications Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |