Correlation Between Synchrony Financial and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial 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 Synchrony Financial and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and SK Telecom Co,, you can compare the effects of market volatilities on Synchrony Financial 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 Synchrony Financial with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and SK Telecom.
Diversification Opportunities for Synchrony Financial and SK Telecom
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Synchrony and S1KM34 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial 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 Synchrony Financial 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 Synchrony Financial 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 Synchrony Financial i.e., Synchrony Financial and SK Telecom go up and down completely randomly.
Pair Corralation between Synchrony Financial and SK Telecom
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.76 times more return on investment than SK Telecom. However, Synchrony Financial is 1.31 times less risky than SK Telecom. It trades about 0.02 of its potential returns per unit of risk. SK Telecom Co, is currently generating about -0.1 per unit of risk. If you would invest 41,220 in Synchrony Financial on October 28, 2024 and sell it today you would earn a total of 180.00 from holding Synchrony Financial or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synchrony Financial vs. SK Telecom Co,
Performance |
| Timeline |
| Synchrony Financial |
| SK Telecom Co, |
Synchrony Financial and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and SK Telecom
The main advantage of trading using opposite Synchrony Financial and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial 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.| Synchrony Financial vs. Sumitomo Mitsui Financial | Synchrony Financial vs. Spotify Technology SA | Synchrony Financial vs. Costco Wholesale | Synchrony Financial vs. Bank of America |
| SK Telecom vs. Zebra Technologies | SK Telecom vs. United Natural Foods, | SK Telecom vs. Spotify Technology SA | SK Telecom vs. PENN Entertainment, |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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