Correlation Between Hellenic Telecommunicatio and SK Telecom

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

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

Diversification Opportunities for Hellenic Telecommunicatio and SK Telecom

0.58

Correlation Coefficient

Hellenic Telecommunicatio  SK Telecom

Very weak diversification

The 3 months correlation between Hellenic and SKM is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Telecommunications Or and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Hellenic Telecommunicatio 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 Hellenic Telecommunications Org 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 Hellenic Telecommunicatio i.e., Hellenic Telecommunicatio and SK Telecom go up and down completely randomly.

Pair Corralation between Hellenic Telecommunicatio and SK Telecom

Assuming the 90 days horizon Hellenic Telecommunications Org is expected to generate 2.27 times more return on investment than SK Telecom. However, Hellenic Telecommunicatio is 2.27 times more volatile than SK Telecom Co. It trades about 0.02 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.03 per unit of risk. If you would invest  692.00  in Hellenic Telecommunications Org on September 27, 2024 and sell it today you would earn a total of  50.00  from holding Hellenic Telecommunications Org or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Hellenic Telecommunications Or  vs.  SK Telecom Co

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Telecommunications Org has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SK Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SK Telecom Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Hellenic Telecommunicatio and SK Telecom

The main advantage of trading using opposite Hellenic Telecommunicatio and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Telecommunicatio 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 Hellenic Telecommunications Org 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.