Correlation Between SK Telecom and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Alibaba Group 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 Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Telecom Co, and Alibaba Group Holding, you can compare the effects of market volatilities on SK Telecom and Alibaba Group 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 Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Alibaba Group.
Diversification Opportunities for SK Telecom and Alibaba Group
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between S1KM34 and Alibaba is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co, and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding 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 Co, are associated (or correlated) with Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of SK Telecom i.e., SK Telecom and Alibaba Group go up and down completely randomly.
Pair Corralation between SK Telecom and Alibaba Group
Assuming the 90 days trading horizon SK Telecom Co, is expected to generate 0.62 times more return on investment than Alibaba Group. However, SK Telecom Co, is 1.62 times less risky than Alibaba Group. It trades about 0.04 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.0 per unit of risk. If you would invest 2,564 in SK Telecom Co, on October 14, 2024 and sell it today you would earn a total of 654.00 from holding SK Telecom Co, or generate 25.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
SK Telecom Co, vs. Alibaba Group Holding
Performance |
| Timeline |
| SK Telecom Co, |
| Alibaba Group Holding |
SK Telecom and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Alibaba Group
The main advantage of trading using opposite SK Telecom and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| SK Telecom vs. Synchrony Financial | SK Telecom vs. MAHLE Metal Leve | SK Telecom vs. Paycom Software | SK Telecom vs. Guidewire Software, |
| Alibaba Group vs. Global X Funds | Alibaba Group vs. Metalurgica Gerdau SA | Alibaba Group vs. Nordon Indstrias Metalrgicas | Alibaba Group vs. SK Telecom Co, |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |