Correlation Between SK Telecom and Advanced Info
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Advanced Info 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 Advanced Info 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 Advanced Info Service, you can compare the effects of market volatilities on SK Telecom and Advanced Info 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 Advanced Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Advanced Info.
Diversification Opportunities for SK Telecom and Advanced Info
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKM and Advanced is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service 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 Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of SK Telecom i.e., SK Telecom and Advanced Info go up and down completely randomly.
Pair Corralation between SK Telecom and Advanced Info
Considering the 90-day investment horizon SK Telecom Co is expected to generate 0.35 times more return on investment than Advanced Info. However, SK Telecom Co is 2.82 times less risky than Advanced Info. It trades about 0.06 of its potential returns per unit of risk. Advanced Info Service is currently generating about -0.02 per unit of risk. If you would invest 2,129 in SK Telecom Co on March 25, 2025 and sell it today you would earn a total of 126.00 from holding SK Telecom Co or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Telecom Co vs. Advanced Info Service
Performance |
| Timeline |
| SK Telecom |
| Advanced Info Service |
SK Telecom and Advanced Info Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Telecom and Advanced Info
The main advantage of trading using opposite SK Telecom and Advanced Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Advanced Info 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 Advanced Info will offset losses from the drop in Advanced Info's long position.| SK Telecom vs. TIM Participacoes SA | SK Telecom vs. PLDT Inc ADR | SK Telecom vs. Liberty Broadband Srs | SK Telecom vs. Liberty Broadband Srs |
| Advanced Info vs. BCE Inc | Advanced Info vs. Axiologix | Advanced Info vs. American Nortel Communications |
Check out your portfolio center.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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