Correlation Between SK TELECOM and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and PLAY2CHILL 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 PLAY2CHILL 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 PLAY2CHILL SA ZY, you can compare the effects of market volatilities on SK TELECOM and PLAY2CHILL 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 PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and PLAY2CHILL.
Diversification Opportunities for SK TELECOM and PLAY2CHILL
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between KMBA and PLAY2CHILL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY 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 PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of SK TELECOM i.e., SK TELECOM and PLAY2CHILL go up and down completely randomly.
Pair Corralation between SK TELECOM and PLAY2CHILL
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 1.01 times more return on investment than PLAY2CHILL. However, SK TELECOM is 1.01 times more volatile than PLAY2CHILL SA ZY. It trades about 0.08 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about 0.03 per unit of risk. If you would invest 1,840 in SK TELECOM TDADR on August 31, 2024 and sell it today you would earn a total of 420.00 from holding SK TELECOM TDADR or generate 22.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
SK TELECOM TDADR vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| SK TELECOM TDADR |
| PLAY2CHILL SA ZY |
SK TELECOM and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and PLAY2CHILL
The main advantage of trading using opposite SK TELECOM and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| SK TELECOM vs. SEI INVESTMENTS | SK TELECOM vs. Apollo Investment Corp | SK TELECOM vs. Strategic Investments AS | SK TELECOM vs. SIDETRADE EO 1 |
| PLAY2CHILL vs. DEVRY EDUCATION GRP | PLAY2CHILL vs. Strategic Education | PLAY2CHILL vs. Perdoceo Education | PLAY2CHILL vs. TRAINLINE PLC LS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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