Correlation Between SK TELECOM and Takkt AG
Can any of the company-specific risk be diversified away by investing in both SK TELECOM and Takkt AG 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 Takkt AG 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 Takkt AG, you can compare the effects of market volatilities on SK TELECOM and Takkt AG 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 Takkt AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and Takkt AG.
Diversification Opportunities for SK TELECOM and Takkt AG
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KMBA and Takkt is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and Takkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takkt AG 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 Takkt AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takkt AG has no effect on the direction of SK TELECOM i.e., SK TELECOM and Takkt AG go up and down completely randomly.
Pair Corralation between SK TELECOM and Takkt AG
Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 1.3 times more return on investment than Takkt AG. However, SK TELECOM is 1.3 times more volatile than Takkt AG. It trades about 0.0 of its potential returns per unit of risk. Takkt AG is currently generating about -0.14 per unit of risk. If you would invest 2,100 in SK TELECOM TDADR on September 12, 2024 and sell it today you would lose (40.00) from holding SK TELECOM TDADR or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
SK TELECOM TDADR vs. Takkt AG
Performance |
| Timeline |
| SK TELECOM TDADR |
| Takkt AG |
SK TELECOM and Takkt AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK TELECOM and Takkt AG
The main advantage of trading using opposite SK TELECOM and Takkt AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, Takkt AG 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 Takkt AG will offset losses from the drop in Takkt AG's long position.The idea behind SK TELECOM TDADR and Takkt AG 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.| Takkt AG vs. TFS FINANCIAL | Takkt AG vs. USWE SPORTS AB | Takkt AG vs. REVO INSURANCE SPA | Takkt AG vs. Tradegate AG Wertpapierhandelsbank |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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