Correlation Between SK TELECOM and IMPACT SILVER
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and IMPACT SILVER 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 IMPACT SILVER 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 IMPACT SILVER, you can compare the effects of market volatilities on SK TELECOM and IMPACT SILVER 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 IMPACT SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and IMPACT SILVER.
Diversification Opportunities for SK TELECOM and IMPACT SILVER
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between KMBA and IMPACT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and IMPACT SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPACT SILVER 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 IMPACT SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPACT SILVER has no effect on the direction of SK TELECOM i.e., SK TELECOM and IMPACT SILVER go up and down completely randomly.
Pair Corralation between SK TELECOM and IMPACT SILVER
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 0.56 times more return on investment than IMPACT SILVER. However, SK TELECOM TDADR is 1.79 times less risky than IMPACT SILVER. It trades about 0.19 of its potential returns per unit of risk. IMPACT SILVER is currently generating about -0.09 per unit of risk. If you would invest 1,970 in SK TELECOM TDADR on September 1, 2024 and sell it today you would earn a total of 290.00 from holding SK TELECOM TDADR or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SK TELECOM TDADR vs. IMPACT SILVER
Performance |
| Timeline |
| SK TELECOM TDADR |
| IMPACT SILVER |
SK TELECOM and IMPACT SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and IMPACT SILVER
The main advantage of trading using opposite SK TELECOM and IMPACT SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, IMPACT SILVER 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 IMPACT SILVER will offset losses from the drop in IMPACT SILVER's long position.The idea behind SK TELECOM TDADR and IMPACT SILVER 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.| IMPACT SILVER vs. SIVERS SEMICONDUCTORS AB | IMPACT SILVER vs. Darden Restaurants | IMPACT SILVER vs. Reliance Steel Aluminum | IMPACT SILVER 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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