Correlation Between SK Telecom and Unifique Telecomunicaes
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Unifique Telecomunicaes 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 Unifique Telecomunicaes 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 Unifique Telecomunicaes SA, you can compare the effects of market volatilities on SK Telecom and Unifique Telecomunicaes 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 Unifique Telecomunicaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Unifique Telecomunicaes.
Diversification Opportunities for SK Telecom and Unifique Telecomunicaes
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between S1KM34 and Unifique is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co, and Unifique Telecomunicaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifique Telecomunicaes 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 Unifique Telecomunicaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifique Telecomunicaes has no effect on the direction of SK Telecom i.e., SK Telecom and Unifique Telecomunicaes go up and down completely randomly.
Pair Corralation between SK Telecom and Unifique Telecomunicaes
Assuming the 90 days trading horizon SK Telecom Co, is expected to generate 0.69 times more return on investment than Unifique Telecomunicaes. However, SK Telecom Co, is 1.45 times less risky than Unifique Telecomunicaes. It trades about -0.12 of its potential returns per unit of risk. Unifique Telecomunicaes SA is currently generating about -0.15 per unit of risk. If you would invest 3,315 in SK Telecom Co, on October 14, 2024 and sell it today you would lose (97.00) from holding SK Telecom Co, or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co, vs. Unifique Telecomunicaes SA
Performance |
| Timeline |
| SK Telecom Co, |
| Unifique Telecomunicaes |
SK Telecom and Unifique Telecomunicaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Unifique Telecomunicaes
The main advantage of trading using opposite SK Telecom and Unifique Telecomunicaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Unifique Telecomunicaes 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 Unifique Telecomunicaes will offset losses from the drop in Unifique Telecomunicaes' long position.| SK Telecom vs. Paycom Software | SK Telecom vs. Charter Communications | SK Telecom vs. NXP Semiconductors NV | SK Telecom vs. Bemobi Mobile Tech |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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