Correlation Between ATT and SK Telecom
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and SK Telecom Co, you can compare the effects of market volatilities on ATT 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 ATT with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and SK Telecom.
Diversification Opportunities for ATT and SK Telecom
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and SKM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and ATT 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 ATT Inc 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 ATT i.e., ATT and SK Telecom go up and down completely randomly.
Pair Corralation between ATT and SK Telecom
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.17 times more return on investment than SK Telecom. However, ATT is 1.17 times more volatile than SK Telecom Co. It trades about 0.1 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.04 per unit of risk. If you would invest 1,397 in ATT Inc on August 27, 2024 and sell it today you would earn a total of 921.00 from holding ATT Inc or generate 65.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. SK Telecom Co
Performance |
| Timeline |
| ATT Inc |
| SK Telecom |
ATT and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and SK Telecom
The main advantage of trading using opposite ATT and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.The idea behind ATT Inc and SK Telecom Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SK Telecom vs. Anterix | SK Telecom vs. Liberty Broadband Corp | SK Telecom vs. Ooma Inc | SK Telecom vs. IDT Corporation |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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