Correlation Between SK TELECOM and Lendlease
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on SK TELECOM and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and Lendlease.
Diversification Opportunities for SK TELECOM and Lendlease
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KMBA and Lendlease is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of SK TELECOM i.e., SK TELECOM and Lendlease go up and down completely randomly.
Pair Corralation between SK TELECOM and Lendlease
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 0.91 times more return on investment than Lendlease. However, SK TELECOM TDADR is 1.1 times less risky than Lendlease. It trades about 0.02 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of risk. If you would invest 1,775 in SK TELECOM TDADR on November 7, 2024 and sell it today you would earn a total of 265.00 from holding SK TELECOM TDADR or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
SK TELECOM TDADR vs. Lendlease Group
Performance |
| Timeline |
| SK TELECOM TDADR |
| Lendlease Group |
SK TELECOM and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and Lendlease
The main advantage of trading using opposite SK TELECOM and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| SK TELECOM vs. SIVERS SEMICONDUCTORS AB | SK TELECOM vs. NorAm Drilling AS | SK TELECOM vs. Volkswagen AG | SK TELECOM vs. Darden Restaurants |
| Lendlease vs. SILVER BULLET DATA | Lendlease vs. Wizz Air Holdings | Lendlease vs. SOGECLAIR SA INH | Lendlease vs. DICKER DATA LTD |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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