Correlation Between SK TELECOM and Byggmax Group
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and Byggmax Group 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 Byggmax Group 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 Byggmax Group AB, you can compare the effects of market volatilities on SK TELECOM and Byggmax Group 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 Byggmax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and Byggmax Group.
Diversification Opportunities for SK TELECOM and Byggmax Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KMBA and Byggmax is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax Group AB 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 Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of SK TELECOM i.e., SK TELECOM and Byggmax Group go up and down completely randomly.
Pair Corralation between SK TELECOM and Byggmax Group
Assuming the 90 days trading horizon SK TELECOM is expected to generate 3.41 times less return on investment than Byggmax Group. In addition to that, SK TELECOM is 1.6 times more volatile than Byggmax Group AB. It trades about 0.02 of its total potential returns per unit of risk. Byggmax Group AB is currently generating about 0.08 per unit of volatility. If you would invest 385.00 in Byggmax Group AB on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Byggmax Group AB or generate 3.38% 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. Byggmax Group AB
Performance |
| Timeline |
| SK TELECOM TDADR |
| Byggmax Group AB |
SK TELECOM and Byggmax Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and Byggmax Group
The main advantage of trading using opposite SK TELECOM and Byggmax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, Byggmax Group 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 Byggmax Group will offset losses from the drop in Byggmax Group'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 |
| Byggmax Group vs. Lowes Companies | Byggmax Group vs. Haverty Furniture Companies | Byggmax Group vs. Superior Plus Corp | Byggmax Group vs. SIVERS SEMICONDUCTORS AB |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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