Correlation Between SK Telecom and Telecom Argentina

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

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

Diversification Opportunities for SK Telecom and Telecom Argentina

-0.24

Correlation Coefficient

SK Telecom  Telecom Argentina

Very good diversification

The 3 months correlation between SKM and Telecom is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Co are associated (or correlated) with Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of SK Telecom i.e., SK Telecom and Telecom Argentina go up and down completely randomly.

Pair Corralation between SK Telecom and Telecom Argentina

Considering the 90-day investment horizon SK Telecom Co is expected to generate 0.31 times more return on investment than Telecom Argentina. However, SK Telecom Co is 3.18 times less risky than Telecom Argentina. It trades about -0.01 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about -0.06 per unit of risk. If you would invest  2,148  in SK Telecom Co on December 26, 2024 and sell it today you would lose (19.00) from holding SK Telecom Co or give up 0.88% of portfolio value over 90 days.

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

SK Telecom Co  vs.  Telecom Argentina SA

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.

Telecom Argentina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telecom Argentina SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with SK Telecom and Telecom Argentina

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

The idea behind SK Telecom Co and Telecom Argentina SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..