Correlation Between SK TELECOM and CTS Eventim

Can any of the company-specific risk be diversified away by investing in both SK TELECOM and CTS Eventim 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 CTS Eventim 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 CTS Eventim AG, you can compare the effects of market volatilities on SK TELECOM and CTS Eventim 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 CTS Eventim. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK TELECOM and CTS Eventim.

Diversification Opportunities for SK TELECOM and CTS Eventim

-0.29

Correlation Coefficient

SK TELECOM  CTS Eventim

Very good diversification

The 3 months correlation between KMBA and CTS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SK TELECOM TDADR and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG 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 CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of SK TELECOM i.e., SK TELECOM and CTS Eventim go up and down completely randomly.

Pair Corralation between SK TELECOM and CTS Eventim

Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 1.19 times more return on investment than CTS Eventim. However, SK TELECOM is 1.19 times more volatile than CTS Eventim AG. It trades about 0.06 of its potential returns per unit of risk. CTS Eventim AG is currently generating about 0.01 per unit of risk. If you would invest  2,060  in SK TELECOM TDADR on September 5, 2024 and sell it today you would earn a total of  180.00  from holding SK TELECOM TDADR or generate 8.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

SK TELECOM TDADR  vs.  CTS Eventim AG

SK TELECOM TDADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SK TELECOM TDADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, SK TELECOM may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CTS Eventim AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTS Eventim AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, CTS Eventim is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SK TELECOM and CTS Eventim

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

The idea behind SK TELECOM TDADR and CTS Eventim AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.