Correlation Between Nippon Telegraph and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Nippon Telegraph 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 Nippon Telegraph and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Telegraph and and SK Telecom Co, you can compare the effects of market volatilities on Nippon Telegraph 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 Nippon Telegraph with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Telegraph and SK Telecom.
Diversification Opportunities for Nippon Telegraph and SK Telecom
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nippon and SKM is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Telegraph and and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Nippon Telegraph 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 Nippon Telegraph and 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 has no effect on the direction of Nippon Telegraph i.e., Nippon Telegraph and SK Telecom go up and down completely randomly.
Pair Corralation between Nippon Telegraph and SK Telecom
If you would invest 2,104 in SK Telecom Co on November 1, 2024 and sell it today you would earn a total of 46.00 from holding SK Telecom Co or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Nippon Telegraph and vs. SK Telecom Co
Performance |
| Timeline |
| Nippon Telegraph |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SK Telecom |
Nippon Telegraph and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Telegraph and SK Telecom
The main advantage of trading using opposite Nippon Telegraph and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Telegraph 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.| Nippon Telegraph vs. Liberty Broadband Srs | Nippon Telegraph vs. Cogent Communications Group | Nippon Telegraph vs. SK Telecom Co | Nippon Telegraph vs. SwissCom AG |
| SK Telecom vs. TIM Participacoes SA | SK Telecom vs. PLDT Inc ADR | SK Telecom vs. Liberty Broadband Srs | SK Telecom vs. Liberty Broadband Srs |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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