Correlation Between SK Telecom and VEON
Can any of the company-specific risk be diversified away by investing in both SK Telecom and VEON 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 VEON 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 VEON, you can compare the effects of market volatilities on SK Telecom and VEON 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 VEON. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and VEON.
Diversification Opportunities for SK Telecom and VEON
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SKM and VEON is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and VEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEON 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 VEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEON has no effect on the direction of SK Telecom i.e., SK Telecom and VEON go up and down completely randomly.
Pair Corralation between SK Telecom and VEON
Considering the 90-day investment horizon SK Telecom Co is expected to under-perform the VEON. But the stock apears to be less risky and, when comparing its historical volatility, SK Telecom Co is 2.11 times less risky than VEON. The stock trades about -0.04 of its potential returns per unit of risk. The VEON is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 3,904 in VEON on October 21, 2024 and sell it today you would earn a total of 696.00 from holding VEON or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co vs. VEON
Performance |
| Timeline |
| SK Telecom |
| VEON |
SK Telecom and VEON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and VEON
The main advantage of trading using opposite SK Telecom and VEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, VEON 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 VEON will offset losses from the drop in VEON'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 |
| VEON vs. Telecom Argentina SA | VEON vs. Telkom Indonesia Tbk | VEON vs. PLDT Inc ADR | VEON vs. Telefonica Brasil SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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