Correlation Between Kbi Metal and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and SK Telecom Co, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and SK Telecom.
Diversification Opportunities for Kbi Metal and SK Telecom
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kbi and 017670 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Kbi Metal 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 Kbi Metal Co 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 Kbi Metal i.e., Kbi Metal and SK Telecom go up and down completely randomly.
Pair Corralation between Kbi Metal and SK Telecom
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 4.35 times more return on investment than SK Telecom. However, Kbi Metal is 4.35 times more volatile than SK Telecom Co. It trades about 0.04 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.06 per unit of risk. If you would invest 124,000 in Kbi Metal Co on September 26, 2024 and sell it today you would earn a total of 75,000 from holding Kbi Metal Co or generate 60.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kbi Metal Co vs. SK Telecom Co
Performance |
Timeline |
Kbi Metal |
SK Telecom |
Kbi Metal and SK Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kbi Metal and SK Telecom
The main advantage of trading using opposite Kbi Metal and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.Kbi Metal vs. Woori Technology Investment | Kbi Metal vs. Samsung Card Co | Kbi Metal vs. Korea Real Estate | Kbi Metal vs. CHOROKBAEM PANY Co |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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