Correlation Between SK Telecom and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Curtiss Wright 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 Curtiss Wright 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 Curtiss Wright, you can compare the effects of market volatilities on SK Telecom and Curtiss Wright 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 Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Curtiss Wright.
Diversification Opportunities for SK Telecom and Curtiss Wright
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKM and Curtiss is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright 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 Curtiss Wright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Wright has no effect on the direction of SK Telecom i.e., SK Telecom and Curtiss Wright go up and down completely randomly.
Pair Corralation between SK Telecom and Curtiss Wright
Considering the 90-day investment horizon SK Telecom Co is expected to under-perform the Curtiss Wright. In addition to that, SK Telecom is 1.01 times more volatile than Curtiss Wright. It trades about -0.08 of its total potential returns per unit of risk. Curtiss Wright is currently generating about 0.2 per unit of volatility. If you would invest 25,557 in Curtiss Wright on February 4, 2024 and sell it today you would earn a total of 1,260 from holding Curtiss Wright or generate 4.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
SK Telecom Co vs. Curtiss Wright
Performance |
Timeline |
SK Telecom |
Curtiss Wright |
SK Telecom and Curtiss Wright Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SK Telecom and Curtiss Wright
The main advantage of trading using opposite SK Telecom and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Curtiss Wright 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 Curtiss Wright will offset losses from the drop in Curtiss Wright's long position.SK Telecom vs. ATT Inc | SK Telecom vs. Comcast Corp | SK Telecom vs. Lumen Technologies | SK Telecom vs. Verizon Communications |
Curtiss Wright vs. General Dynamics | Curtiss Wright vs. Huntington Ingalls Industries | Curtiss Wright vs. Rocket Lab USA | Curtiss Wright vs. Astra Space |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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