Correlation Between Radius Global and SK Telecom

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

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

Diversification Opportunities for Radius Global and SK Telecom

0.0

Correlation Coefficient

Radius Global  SK Telecom

Pay attention - limited upside

The 3 months correlation between Radius and SKM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Radius Global Infrastructure and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and Radius Global 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 Radius Global Infrastructure 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 Radius Global i.e., Radius Global and SK Telecom go up and down completely randomly.

Pair Corralation between Radius Global and SK Telecom

If you would invest (100.00) in Radius Global Infrastructure on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Radius Global Infrastructure or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Radius Global Infrastructure  vs.  SK Telecom Co

Radius Global Infras

Risk-Adjusted Performance

Very Weak

Over the last 90 days Radius Global Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Radius Global is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

SK Telecom

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. In spite of very healthy forward-looking signals, SK Telecom is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Radius Global and SK Telecom

The main advantage of trading using opposite Radius Global and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radius Global 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 Radius Global Infrastructure 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.