Correlation Between Stepstone and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Stepstone 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 Stepstone and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and SK Telecom Co, you can compare the effects of market volatilities on Stepstone 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 Stepstone with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and SK Telecom.
Diversification Opportunities for Stepstone and SK Telecom
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stepstone and SKM is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Stepstone 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 Stepstone Group 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 Stepstone i.e., Stepstone and SK Telecom go up and down completely randomly.
Pair Corralation between Stepstone and SK Telecom
Given the investment horizon of 90 days Stepstone Group is expected to generate 2.16 times more return on investment than SK Telecom. However, Stepstone is 2.16 times more volatile than SK Telecom Co. It trades about 0.13 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.21 per unit of risk. If you would invest 6,131 in Stepstone Group on August 31, 2024 and sell it today you would earn a total of 473.00 from holding Stepstone Group or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. SK Telecom Co
Performance |
| Timeline |
| Stepstone Group |
| SK Telecom |
Stepstone and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and SK Telecom
The main advantage of trading using opposite Stepstone and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone 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.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| SK Telecom vs. RLJ Lodging Trust | SK Telecom vs. Aquagold International | SK Telecom vs. Stepstone Group | SK Telecom vs. Morningstar Unconstrained Allocation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |