Correlation Between Sea and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and SK Telecom Co, you can compare the effects of market volatilities on Sea 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 Sea with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and SK Telecom.
Diversification Opportunities for Sea and SK Telecom
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sea and SKM is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sea and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Sea 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 Sea 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 has no effect on the direction of Sea i.e., Sea and SK Telecom go up and down completely randomly.
Pair Corralation between Sea and SK Telecom
Allowing for the 90-day total investment horizon Sea is expected to generate 2.16 times more return on investment than SK Telecom. However, Sea is 2.16 times more volatile than SK Telecom Co. It trades about 0.29 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.2 per unit of risk. If you would invest 9,599 in Sea on August 30, 2024 and sell it today you would earn a total of 1,972 from holding Sea or generate 20.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. SK Telecom Co
Performance |
| Timeline |
| Sea |
| SK Telecom |
Sea and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and SK Telecom
The main advantage of trading using opposite Sea and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
| SK Telecom vs. TIM Participacoes SA | SK Telecom vs. PLDT Inc ADR | SK Telecom vs. Liberty Broadband Srs | SK Telecom vs. Liberty Broadband Srs |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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