Correlation Between SK TELECOM and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) 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 CEOTRONICS, you can compare the effects of market volatilities on SK TELECOM and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and CEOTRONICS (CEKSG).
Diversification Opportunities for SK TELECOM and CEOTRONICS (CEKSG)
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KMBA and CEOTRONICS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of SK TELECOM i.e., SK TELECOM and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between SK TELECOM and CEOTRONICS (CEKSG)
Assuming the 90 days trading horizon SK TELECOM is expected to generate 1.24 times less return on investment than CEOTRONICS (CEKSG). In addition to that, SK TELECOM is 1.16 times more volatile than CEOTRONICS. It trades about 0.19 of its total potential returns per unit of risk. CEOTRONICS is currently generating about 0.28 per unit of volatility. If you would invest 520.00 in CEOTRONICS on September 1, 2024 and sell it today you would earn a total of 100.00 from holding CEOTRONICS or generate 19.23% 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. CEOTRONICS
Performance |
| Timeline |
| SK TELECOM TDADR |
| CEOTRONICS (CEKSG) |
SK TELECOM and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and CEOTRONICS (CEKSG)
The main advantage of trading using opposite SK TELECOM and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.The idea behind SK TELECOM TDADR and CEOTRONICS 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.| CEOTRONICS (CEKSG) vs. SIVERS SEMICONDUCTORS AB | CEOTRONICS (CEKSG) vs. Darden Restaurants | CEOTRONICS (CEKSG) vs. Reliance Steel Aluminum | CEOTRONICS (CEKSG) vs. Q2M Managementberatung AG |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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