Correlation Between SK TELECOM and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and Sekisui Chemical 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 Sekisui Chemical 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 Sekisui Chemical Co, you can compare the effects of market volatilities on SK TELECOM and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and Sekisui Chemical.
Diversification Opportunities for SK TELECOM and Sekisui Chemical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between KMBA and Sekisui is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of SK TELECOM i.e., SK TELECOM and Sekisui Chemical go up and down completely randomly.
Pair Corralation between SK TELECOM and Sekisui Chemical
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 0.51 times more return on investment than Sekisui Chemical. However, SK TELECOM TDADR is 1.95 times less risky than Sekisui Chemical. It trades about -0.09 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about -0.29 per unit of risk. If you would invest 2,020 in SK TELECOM TDADR on October 28, 2024 and sell it today you would lose (30.00) from holding SK TELECOM TDADR or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
SK TELECOM TDADR vs. Sekisui Chemical Co
Performance |
| Timeline |
| SK TELECOM TDADR |
| Sekisui Chemical |
SK TELECOM and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and Sekisui Chemical
The main advantage of trading using opposite SK TELECOM and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| SK TELECOM vs. CNVISION MEDIA | SK TELECOM vs. RCS MediaGroup SpA | SK TELECOM vs. ZINC MEDIA GR | SK TELECOM vs. ATRESMEDIA |
| Sekisui Chemical vs. Virtu Financial | Sekisui Chemical vs. Chiba Bank | Sekisui Chemical vs. SUN LIFE FINANCIAL | Sekisui Chemical vs. NTT DATA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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