Correlation Between SK TELECOM and TERADATA
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and TERADATA 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 TERADATA 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 TERADATA, you can compare the effects of market volatilities on SK TELECOM and TERADATA 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 TERADATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and TERADATA.
Diversification Opportunities for SK TELECOM and TERADATA
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KMBA and TERADATA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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 TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of SK TELECOM i.e., SK TELECOM and TERADATA go up and down completely randomly.
Pair Corralation between SK TELECOM and TERADATA
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 1.62 times more return on investment than TERADATA. However, SK TELECOM is 1.62 times more volatile than TERADATA. It trades about 0.01 of its potential returns per unit of risk. TERADATA is currently generating about -0.1 per unit of risk. If you would invest 2,040 in SK TELECOM TDADR on October 12, 2024 and sell it today you would earn a total of 0.00 from holding SK TELECOM TDADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SK TELECOM TDADR vs. TERADATA
Performance |
| Timeline |
| SK TELECOM TDADR |
| TERADATA |
SK TELECOM and TERADATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and TERADATA
The main advantage of trading using opposite SK TELECOM and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, TERADATA 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 TERADATA will offset losses from the drop in TERADATA's long position.| SK TELECOM vs. ALTAIR RES INC | SK TELECOM vs. Ryanair Holdings plc | SK TELECOM vs. Major Drilling Group | SK TELECOM vs. Micron Technology |
| TERADATA vs. Charter Communications | TERADATA vs. SK TELECOM TDADR | TERADATA vs. Telecom Argentina SA | TERADATA vs. TOMBADOR IRON LTD |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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