Correlation Between SK TELECOM and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and FRACTAL GAMING 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 FRACTAL GAMING 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 FRACTAL GAMING GROUP, you can compare the effects of market volatilities on SK TELECOM and FRACTAL GAMING 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 FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and FRACTAL GAMING.
Diversification Opportunities for SK TELECOM and FRACTAL GAMING
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KMBA and FRACTAL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of SK TELECOM i.e., SK TELECOM and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between SK TELECOM and FRACTAL GAMING
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 0.58 times more return on investment than FRACTAL GAMING. However, SK TELECOM TDADR is 1.72 times less risky than FRACTAL GAMING. It trades about 0.03 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.01 per unit of risk. If you would invest 1,840 in SK TELECOM TDADR on August 25, 2024 and sell it today you would earn a total of 200.00 from holding SK TELECOM TDADR or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK TELECOM TDADR vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| SK TELECOM TDADR |
| FRACTAL GAMING GROUP |
SK TELECOM and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and FRACTAL GAMING
The main advantage of trading using opposite SK TELECOM and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.The idea behind SK TELECOM TDADR and FRACTAL GAMING GROUP 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.| FRACTAL GAMING vs. Treasury Wine Estates | FRACTAL GAMING vs. MOVIE GAMES SA | FRACTAL GAMING vs. Dalata Hotel Group | FRACTAL GAMING vs. NAKED WINES PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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