Correlation Between SK Telecom and Samsung Card

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Samsung Card 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 SK Telecom and Samsung Card into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Telecom Co and Samsung Card Co, you can compare the effects of market volatilities on SK Telecom and Samsung Card 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 SK Telecom with a short position of Samsung Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Samsung Card.

Diversification Opportunities for SK Telecom and Samsung Card

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between 017670 and Samsung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Samsung Card Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Card and SK Telecom 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 SK Telecom Co are associated (or correlated) with Samsung Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Card has no effect on the direction of SK Telecom i.e., SK Telecom and Samsung Card go up and down completely randomly.

Pair Corralation between SK Telecom and Samsung Card

Assuming the 90 days trading horizon SK Telecom Co is expected to generate 0.81 times more return on investment than Samsung Card. However, SK Telecom Co is 1.24 times less risky than Samsung Card. It trades about -0.01 of its potential returns per unit of risk. Samsung Card Co is currently generating about -0.01 per unit of risk. If you would invest  5,650,000  in SK Telecom Co on October 10, 2024 and sell it today you would lose (40,000) from holding SK Telecom Co or give up 0.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

SK Telecom Co  vs.  Samsung Card Co

 Performance 
       Timeline  
SK Telecom 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
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.
Samsung Card 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samsung Card Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samsung Card is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SK Telecom and Samsung Card Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SK Telecom and Samsung Card

The main advantage of trading using opposite SK Telecom and Samsung Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Samsung Card 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 Samsung Card will offset losses from the drop in Samsung Card's long position.
The idea behind SK Telecom Co and Samsung Card 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.
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities