Correlation Between Zillow Group and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Zillow Group 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 Zillow Group and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and SK Telecom Co, you can compare the effects of market volatilities on Zillow Group 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 Zillow Group with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and SK Telecom.
Diversification Opportunities for Zillow Group and SK Telecom
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zillow and SKM is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Zillow Group 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 Zillow Group Class 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 Zillow Group i.e., Zillow Group and SK Telecom go up and down completely randomly.
Pair Corralation between Zillow Group and SK Telecom
Taking into account the 90-day investment horizon Zillow Group Class is expected to generate 5.49 times more return on investment than SK Telecom. However, Zillow Group is 5.49 times more volatile than SK Telecom Co. It trades about 0.31 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 5,979 in Zillow Group Class on August 27, 2024 and sell it today you would earn a total of 2,398 from holding Zillow Group Class or generate 40.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zillow Group Class vs. SK Telecom Co
Performance |
| Timeline |
| Zillow Group Class |
| SK Telecom |
Zillow Group and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and SK Telecom
The main advantage of trading using opposite Zillow Group and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group 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.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio Inc |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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