Correlation Between SK TELECOM and SIEM OFFSHORE

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

Diversification Opportunities for SK TELECOM and SIEM OFFSHORE

0.0

Correlation Coefficient

SK TELECOM  SIEM OFFSHORE

Pay attention - limited upside

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

Pair Corralation between SK TELECOM and SIEM OFFSHORE

Assuming the 90 days trading horizon SK TELECOM TDADR is expected to generate 1.09 times more return on investment than SIEM OFFSHORE. However, SK TELECOM is 1.09 times more volatile than SIEM OFFSHORE NEW. It trades about 0.01 of its potential returns per unit of risk. SIEM OFFSHORE NEW is currently generating about -0.05 per unit of risk. If you would invest  2,100  in SK TELECOM TDADR on September 22, 2024 and sell it today you would lose (20.00) from holding SK TELECOM TDADR or give up 0.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SK TELECOM TDADR  vs.  SIEM OFFSHORE NEW

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SIEM OFFSHORE NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIEM OFFSHORE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SK TELECOM and SIEM OFFSHORE

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

The idea behind SK TELECOM TDADR and SIEM OFFSHORE NEW 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.