Correlation Between Adaptive Plasma and SK Telecom

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

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

Diversification Opportunities for Adaptive Plasma and SK Telecom

-0.53

Correlation Coefficient

Adaptive Plasma  SK Telecom

Excellent diversification

The 3 months correlation between Adaptive and 017670 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Adaptive Plasma Technology and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Adaptive Plasma 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 Adaptive Plasma Technology 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 Adaptive Plasma i.e., Adaptive Plasma and SK Telecom go up and down completely randomly.

Pair Corralation between Adaptive Plasma and SK Telecom

Assuming the 90 days trading horizon Adaptive Plasma Technology is expected to under-perform the SK Telecom. In addition to that, Adaptive Plasma is 2.26 times more volatile than SK Telecom Co. It trades about -0.24 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.16 per unit of volatility. If you would invest  5,441,007  in SK Telecom Co on August 31, 2024 and sell it today you would earn a total of  708,993  from holding SK Telecom Co or generate 13.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Adaptive Plasma Technology  vs.  SK Telecom Co

Adaptive Plasma Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adaptive Plasma Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

SK Telecom

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SK Telecom Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SK Telecom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adaptive Plasma and SK Telecom

The main advantage of trading using opposite Adaptive Plasma and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptive Plasma 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 Adaptive Plasma Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.