Correlation Between Shenandoah Telecommunicatio and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications Co and SK Telecom Co, you can compare the effects of market volatilities on Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and SK Telecom.
Diversification Opportunities for Shenandoah Telecommunicatio and SK Telecom
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenandoah and SKM is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Shenandoah Telecommunicatio 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 Shenandoah Telecommunications Co 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 Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and SK Telecom go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and SK Telecom
Given the investment horizon of 90 days Shenandoah Telecommunications Co is expected to under-perform the SK Telecom. In addition to that, Shenandoah Telecommunicatio is 2.96 times more volatile than SK Telecom Co. It trades about -0.02 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.04 per unit of volatility. If you would invest 2,377 in SK Telecom Co on August 30, 2024 and sell it today you would earn a total of 50.00 from holding SK Telecom Co or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenandoah Telecommunications vs. SK Telecom Co
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| SK Telecom |
Shenandoah Telecommunicatio and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and SK Telecom
The main advantage of trading using opposite Shenandoah Telecommunicatio and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio 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.| Shenandoah Telecommunicatio vs. Anterix | Shenandoah Telecommunicatio vs. Liberty Broadband Corp | Shenandoah Telecommunicatio vs. Ooma Inc | Shenandoah Telecommunicatio vs. IDT Corporation |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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