Correlation Between SK Telecom and Weiqiao Textile
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Weiqiao Textile 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 Weiqiao Textile 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 Weiqiao Textile, you can compare the effects of market volatilities on SK Telecom and Weiqiao Textile 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 Weiqiao Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Weiqiao Textile.
Diversification Opportunities for SK Telecom and Weiqiao Textile
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKM and Weiqiao is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Weiqiao Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiqiao Textile 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 Weiqiao Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiqiao Textile has no effect on the direction of SK Telecom i.e., SK Telecom and Weiqiao Textile go up and down completely randomly.
Pair Corralation between SK Telecom and Weiqiao Textile
Considering the 90-day investment horizon SK Telecom is expected to generate 5.5 times less return on investment than Weiqiao Textile. But when comparing it to its historical volatility, SK Telecom Co is 2.01 times less risky than Weiqiao Textile. It trades about 0.05 of its potential returns per unit of risk. Weiqiao Textile is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Weiqiao Textile on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Weiqiao Textile or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.49% |
| Values | Daily Returns |
SK Telecom Co vs. Weiqiao Textile
Performance |
| Timeline |
| SK Telecom |
| Weiqiao Textile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SK Telecom and Weiqiao Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Weiqiao Textile
The main advantage of trading using opposite SK Telecom and Weiqiao Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Weiqiao Textile 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 Weiqiao Textile will offset losses from the drop in Weiqiao Textile'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 |
| Weiqiao Textile vs. Sonida Senior Living | Weiqiao Textile vs. Solstad Offshore ASA | Weiqiao Textile vs. Postal Realty Trust | Weiqiao Textile vs. Toro Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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