Correlation Between SK TELECOM and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and AOI Electronics 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 AOI Electronics 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 AOI Electronics Co, you can compare the effects of market volatilities on SK TELECOM and AOI Electronics 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and AOI Electronics.
Diversification Opportunities for SK TELECOM and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KMBA and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of SK TELECOM i.e., SK TELECOM and AOI Electronics go up and down completely randomly.
Pair Corralation between SK TELECOM and AOI Electronics
If you would invest 1,920 in SK TELECOM TDADR on September 3, 2024 and sell it today you would earn a total of 340.00 from holding SK TELECOM TDADR or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
SK TELECOM TDADR vs. AOI Electronics Co
Performance |
| Timeline |
| SK TELECOM TDADR |
| AOI Electronics |
SK TELECOM and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and AOI Electronics
The main advantage of trading using opposite SK TELECOM and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.The idea behind SK TELECOM TDADR and AOI Electronics Co 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.| AOI Electronics vs. Check Point Software | AOI Electronics vs. Unity Software | AOI Electronics vs. Guidewire Software | AOI Electronics vs. Alfa Financial Software |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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