Correlation Between SK TELECOM and AXA SA
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and AXA SA 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 AXA SA 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 AXA SA, you can compare the effects of market volatilities on SK TELECOM and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and AXA SA.
Diversification Opportunities for SK TELECOM and AXA SA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KMBA and AXA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of SK TELECOM i.e., SK TELECOM and AXA SA go up and down completely randomly.
Pair Corralation between SK TELECOM and AXA SA
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 2.08 times more return on investment than AXA SA. However, SK TELECOM is 2.08 times more volatile than AXA SA. It trades about 0.02 of its potential returns per unit of risk. AXA SA is currently generating about -0.04 per unit of risk. If you would invest 2,080 in SK TELECOM TDADR on September 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK TELECOM TDADR vs. AXA SA
Performance |
| Timeline |
| SK TELECOM TDADR |
| AXA SA |
SK TELECOM and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and AXA SA
The main advantage of trading using opposite SK TELECOM and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| SK TELECOM vs. Coor Service Management | SK TELECOM vs. Corporate Travel Management | SK TELECOM vs. AOYAMA TRADING | SK TELECOM vs. CeoTronics AG |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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