Correlation Between Samsung Publishing and SK Telecom

Can any of the company-specific risk be diversified away by investing in both Samsung Publishing 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 Samsung Publishing and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Publishing Co and SK Telecom Co, you can compare the effects of market volatilities on Samsung Publishing 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 Samsung Publishing with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Publishing and SK Telecom.

Diversification Opportunities for Samsung Publishing and SK Telecom

-0.17

Correlation Coefficient

Samsung Publishing  SK Telecom

Good diversification

The 3 months correlation between Samsung and 017670 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing i.e., Samsung Publishing and SK Telecom go up and down completely randomly.

Pair Corralation between Samsung Publishing and SK Telecom

Assuming the 90 days trading horizon Samsung Publishing Co is expected to generate 2.07 times more return on investment than SK Telecom. However, Samsung Publishing is 2.07 times more volatile than SK Telecom Co. It trades about 0.23 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.11 per unit of risk. If you would invest  1,382,000  in Samsung Publishing Co on September 20, 2024 and sell it today you would earn a total of  235,000  from holding Samsung Publishing Co or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Samsung Publishing Co  vs.  SK Telecom Co

Samsung Publishing

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

SK Telecom

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SK Telecom Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SK Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samsung Publishing and SK Telecom

The main advantage of trading using opposite Samsung Publishing and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Publishing 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 Samsung Publishing Co 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.