Correlation Between SK TELECOM and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and Cairo Communication 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 Cairo Communication 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 Cairo Communication SpA, you can compare the effects of market volatilities on SK TELECOM and Cairo Communication 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 Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and Cairo Communication.
Diversification Opportunities for SK TELECOM and Cairo Communication
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KMBA and Cairo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA 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 Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of SK TELECOM i.e., SK TELECOM and Cairo Communication go up and down completely randomly.
Pair Corralation between SK TELECOM and Cairo Communication
Assuming the 90 days trading horizon SK TELECOM is expected to generate 1.65 times less return on investment than Cairo Communication. But when comparing it to its historical volatility, SK TELECOM TDADR is 1.17 times less risky than Cairo Communication. It trades about 0.04 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Cairo Communication SpA on October 13, 2024 and sell it today you would earn a total of 39.00 from holding Cairo Communication SpA or generate 19.7% 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. Cairo Communication SpA
Performance |
| Timeline |
| SK TELECOM TDADR |
| Cairo Communication SpA |
SK TELECOM and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and Cairo Communication
The main advantage of trading using opposite SK TELECOM and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.| SK TELECOM vs. ALTAIR RES INC | SK TELECOM vs. Ryanair Holdings plc | SK TELECOM vs. Major Drilling Group | SK TELECOM vs. Micron Technology |
| Cairo Communication vs. CyberArk Software | Cairo Communication vs. MAGIC SOFTWARE ENTR | Cairo Communication vs. Corporate Travel Management | Cairo Communication vs. AIR PRODCHEMICALS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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