Correlation Between SK Telecom and Altigen Communications
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Altigen Communications 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 Altigen Communications 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 Altigen Communications, you can compare the effects of market volatilities on SK Telecom and Altigen Communications 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 Altigen Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Altigen Communications.
Diversification Opportunities for SK Telecom and Altigen Communications
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SKM and Altigen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Altigen Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altigen Communications 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 Altigen Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altigen Communications has no effect on the direction of SK Telecom i.e., SK Telecom and Altigen Communications go up and down completely randomly.
Pair Corralation between SK Telecom and Altigen Communications
Considering the 90-day investment horizon SK Telecom Co is expected to generate 0.19 times more return on investment than Altigen Communications. However, SK Telecom Co is 5.27 times less risky than Altigen Communications. It trades about 0.05 of its potential returns per unit of risk. Altigen Communications is currently generating about -0.15 per unit of risk. If you would invest 1,901 in SK Telecom Co on August 31, 2024 and sell it today you would earn a total of 521.00 from holding SK Telecom Co or generate 27.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.02% |
| Values | Daily Returns |
SK Telecom Co vs. Altigen Communications
Performance |
| Timeline |
| SK Telecom |
| Altigen Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SK Telecom and Altigen Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Altigen Communications
The main advantage of trading using opposite SK Telecom and Altigen Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Altigen Communications 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 Altigen Communications will offset losses from the drop in Altigen Communications' long position.| SK Telecom vs. RLJ Lodging Trust | SK Telecom vs. Aquagold International | SK Telecom vs. Stepstone Group | SK Telecom vs. Morningstar Unconstrained Allocation |
| Altigen Communications vs. Aware Inc | Altigen Communications vs. Integrated Ventures | Altigen Communications vs. AudioCodes |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |