Correlation Between Summit Hotel and SK TELECOM
Can any of the company-specific risk be diversified away by investing in both Summit Hotel 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 Summit Hotel and SK TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Hotel Properties and SK TELECOM TDADR, you can compare the effects of market volatilities on Summit Hotel 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 Summit Hotel with a short position of SK TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and SK TELECOM.
Diversification Opportunities for Summit Hotel and SK TELECOM
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and KMBA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties 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 Summit Hotel 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 Summit Hotel Properties 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 Summit Hotel i.e., Summit Hotel and SK TELECOM go up and down completely randomly.
Pair Corralation between Summit Hotel and SK TELECOM
Assuming the 90 days horizon Summit Hotel Properties is expected to under-perform the SK TELECOM. In addition to that, Summit Hotel is 1.2 times more volatile than SK TELECOM TDADR. It trades about -0.08 of its total potential returns per unit of risk. SK TELECOM TDADR is currently generating about 0.01 per unit of volatility. If you would invest 2,040 in SK TELECOM TDADR on October 12, 2024 and sell it today you would earn a total of 0.00 from holding SK TELECOM TDADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Summit Hotel Properties vs. SK TELECOM TDADR
Performance |
| Timeline |
| Summit Hotel Properties |
| SK TELECOM TDADR |
Summit Hotel and SK TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Hotel and SK TELECOM
The main advantage of trading using opposite Summit Hotel and SK TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel 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.| Summit Hotel vs. FIRST SAVINGS FINL | Summit Hotel vs. Darden Restaurants | Summit Hotel vs. INTERSHOP Communications Aktiengesellschaft | Summit Hotel vs. Spirent Communications plc |
| SK TELECOM vs. ALTAIR RES INC | SK TELECOM vs. Ryanair Holdings plc | SK TELECOM vs. Major Drilling Group | SK TELECOM vs. Micron Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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