Correlation Between SK TELECOM and EEDUCATION ALBERT

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

By analyzing existing cross correlation between SK TELECOM TDADR and EEDUCATION ALBERT AB, you can compare the effects of market volatilities on SK TELECOM and EEDUCATION ALBERT 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 EEDUCATION ALBERT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and EEDUCATION ALBERT.

Diversification Opportunities for SK TELECOM and EEDUCATION ALBERT

0.0

Correlation Coefficient

SK TELECOM  EEDUCATION ALBERT

Pay attention - limited upside

The 3 months correlation between KMBA and EEDUCATION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and EEDUCATION ALBERT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EEDUCATION ALBERT 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 TDADR are associated (or correlated) with EEDUCATION ALBERT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EEDUCATION ALBERT has no effect on the direction of SK TELECOM i.e., SK TELECOM and EEDUCATION ALBERT go up and down completely randomly.

Pair Corralation between SK TELECOM and EEDUCATION ALBERT

Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 0.92 times more return on investment than EEDUCATION ALBERT. However, SK TELECOM TDADR is 1.09 times less risky than EEDUCATION ALBERT. It trades about 0.02 of its potential returns per unit of risk. EEDUCATION ALBERT AB is currently generating about -0.01 per unit of risk. If you would invest  1,874  in SK TELECOM TDADR on October 20, 2024 and sell it today you would earn a total of  146.00  from holding SK TELECOM TDADR or generate 7.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.0%
Values	Daily Returns

SK TELECOM TDADR  vs.  EEDUCATION ALBERT AB

SK TELECOM TDADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SK TELECOM TDADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, SK TELECOM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

EEDUCATION ALBERT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EEDUCATION ALBERT AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EEDUCATION ALBERT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SK TELECOM and EEDUCATION ALBERT

The main advantage of trading using opposite SK TELECOM and EEDUCATION ALBERT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK TELECOM position performs unexpectedly, EEDUCATION ALBERT 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 EEDUCATION ALBERT will offset losses from the drop in EEDUCATION ALBERT's long position.

The idea behind SK TELECOM TDADR and EEDUCATION ALBERT AB 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.