Correlation Between Marvell Technology and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and SK Telecom 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 Marvell Technology and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology and SK Telecom Co,, you can compare the effects of market volatilities on Marvell Technology and SK Telecom 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 Marvell Technology with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and SK Telecom.
Diversification Opportunities for Marvell Technology and SK Telecom
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marvell and S1KM34 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology and SK Telecom Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom Co, and Marvell Technology 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 Marvell Technology are associated (or correlated) with SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom Co, has no effect on the direction of Marvell Technology i.e., Marvell Technology and SK Telecom go up and down completely randomly.
Pair Corralation between Marvell Technology and SK Telecom
Assuming the 90 days trading horizon Marvell Technology is expected to generate 1.25 times more return on investment than SK Telecom. However, Marvell Technology is 1.25 times more volatile than SK Telecom Co,. It trades about 0.1 of its potential returns per unit of risk. SK Telecom Co, is currently generating about -0.06 per unit of risk. If you would invest 7,180 in Marvell Technology on October 25, 2024 and sell it today you would earn a total of 274.00 from holding Marvell Technology or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology vs. SK Telecom Co,
Performance |
| Timeline |
| Marvell Technology |
| SK Telecom Co, |
Marvell Technology and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and SK Telecom
The main advantage of trading using opposite Marvell Technology and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, SK Telecom 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 SK Telecom will offset losses from the drop in SK Telecom's long position.| Marvell Technology vs. Paycom Software | Marvell Technology vs. Darden Restaurants, | Marvell Technology vs. United Natural Foods, | Marvell Technology vs. United Airlines Holdings |
| SK Telecom vs. DENTSPLY SIRONA | SK Telecom vs. Marvell Technology | SK Telecom vs. Seagate Technology Holdings | SK Telecom vs. Align Technology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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