Correlation Between SK TELECOM and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on SK TELECOM and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and GAMESTOP.
Diversification Opportunities for SK TELECOM and GAMESTOP
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KMBA and GAMESTOP is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of SK TELECOM i.e., SK TELECOM and GAMESTOP go up and down completely randomly.
Pair Corralation between SK TELECOM and GAMESTOP
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 0.37 times more return on investment than GAMESTOP. However, SK TELECOM TDADR is 2.67 times less risky than GAMESTOP. It trades about -0.03 of its potential returns per unit of risk. GAMESTOP is currently generating about -0.31 per unit of risk. If you would invest 2,040 in SK TELECOM TDADR on November 7, 2024 and sell it today you would lose (20.00) from holding SK TELECOM TDADR or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SK TELECOM TDADR vs. GAMESTOP
Performance |
| Timeline |
| SK TELECOM TDADR |
| GAMESTOP |
SK TELECOM and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and GAMESTOP
The main advantage of trading using opposite SK TELECOM and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| SK TELECOM vs. SENECA FOODS A | SK TELECOM vs. PLAY2CHILL SA ZY | SK TELECOM vs. CAL MAINE FOODS | SK TELECOM vs. ARISTOCRAT LEISURE |
| GAMESTOP vs. Direct Line Insurance | GAMESTOP vs. Zijin Mining Group | GAMESTOP vs. ADRIATIC METALS LS 013355 | GAMESTOP vs. SBI Insurance Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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