Correlation Between SK Telecom and Comcast Corp
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Comcast Corp 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 Comcast Corp 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 Comcast Corp, you can compare the effects of market volatilities on SK Telecom and Comcast Corp 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 Comcast Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Comcast Corp.
Diversification Opportunities for SK Telecom and Comcast Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SKM and Comcast is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of SK Telecom i.e., SK Telecom and Comcast Corp go up and down completely randomly.
Pair Corralation between SK Telecom and Comcast Corp
Considering the 90-day investment horizon SK Telecom Co is expected to under-perform the Comcast Corp. But the stock apears to be less risky and, when comparing its historical volatility, SK Telecom Co is 1.75 times less risky than Comcast Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Comcast Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,155 in Comcast Corp on August 24, 2024 and sell it today you would earn a total of 195.00 from holding Comcast Corp or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co vs. Comcast Corp
Performance |
| Timeline |
| SK Telecom |
| Comcast Corp |
SK Telecom and Comcast Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Comcast Corp
The main advantage of trading using opposite SK Telecom and Comcast Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Comcast Corp 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 Comcast Corp will offset losses from the drop in Comcast Corp's long position.| SK Telecom vs. TIM Participacoes SA | SK Telecom vs. PLDT Inc ADR | SK Telecom vs. Liberty Broadband Srs | SK Telecom vs. Liberty Broadband Srs |
| Comcast Corp vs. Small Cap Core | Comcast Corp vs. FitLife Brands, Common | Comcast Corp vs. Mutual Of America | Comcast Corp vs. Gfl Environmental Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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