Correlation Between Kimberly Clark and SK Telecom

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

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

Diversification Opportunities for Kimberly Clark and SK Telecom

0.22

Correlation Coefficient

Kimberly Clark  SK Telecom

Modest diversification

The 3 months correlation between Kimberly and S1KM34 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark and SK Telecom Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom Co, and Kimberly Clark 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 Kimberly Clark 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 Co, has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and SK Telecom go up and down completely randomly.

Pair Corralation between Kimberly Clark and SK Telecom

Assuming the 90 days trading horizon Kimberly Clark is expected to generate 0.94 times more return on investment than SK Telecom. However, Kimberly Clark is 1.06 times less risky than SK Telecom. It trades about -0.02 of its potential returns per unit of risk. SK Telecom Co, is currently generating about -0.06 per unit of risk. If you would invest  81,272  in Kimberly Clark on December 24, 2024 and sell it today you would lose (2,351) from holding Kimberly Clark or give up 2.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kimberly Clark  vs.  SK Telecom Co,

Kimberly Clark

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kimberly Clark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Kimberly Clark is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SK Telecom Co,

Risk-Adjusted Performance

Very Weak

Over the last 90 days SK Telecom Co, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kimberly Clark and SK Telecom

The main advantage of trading using opposite Kimberly Clark and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimberly Clark 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 Kimberly Clark 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 Stocks Directory module to find actively traded stocks across global markets.