Correlation Between ONEOK and SK TELECOM
Can any of the company-specific risk be diversified away by investing in both ONEOK 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 ONEOK and SK TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and SK TELECOM TDADR, you can compare the effects of market volatilities on ONEOK 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 ONEOK with a short position of SK TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and SK TELECOM.
Diversification Opportunities for ONEOK and SK TELECOM
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ONEOK and KMBA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and SK TELECOM TDADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK TELECOM TDADR and ONEOK 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 ONEOK Inc 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 TDADR has no effect on the direction of ONEOK i.e., ONEOK and SK TELECOM go up and down completely randomly.
Pair Corralation between ONEOK and SK TELECOM
Assuming the 90 days horizon ONEOK Inc is expected to generate 0.71 times more return on investment than SK TELECOM. However, ONEOK Inc is 1.41 times less risky than SK TELECOM. It trades about 0.21 of its potential returns per unit of risk. SK TELECOM TDADR is currently generating about 0.08 per unit of risk. If you would invest 7,059 in ONEOK Inc on September 5, 2024 and sell it today you would earn a total of 3,481 from holding ONEOK Inc or generate 49.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONEOK Inc vs. SK TELECOM TDADR
Performance |
| Timeline |
| ONEOK Inc |
| SK TELECOM TDADR |
ONEOK and SK TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and SK TELECOM
The main advantage of trading using opposite ONEOK and SK TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK 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.| ONEOK vs. Texas Roadhouse | ONEOK vs. United Breweries Co | ONEOK vs. Fevertree Drinks PLC | ONEOK vs. GOLD ROAD RES |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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