Correlation Between TCL MULTIMEDIA and SK TELECOM

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

By analyzing existing cross correlation between TCL MULTIMEDIA TECH and SK TELECOM TDADR, you can compare the effects of market volatilities on TCL MULTIMEDIA 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 TCL MULTIMEDIA with a short position of SK TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCL MULTIMEDIA and SK TELECOM.

Diversification Opportunities for TCL MULTIMEDIA and SK TELECOM

-0.5

Correlation Coefficient

TCL MULTIMEDIA  SK TELECOM

Very good diversification

The 3 months correlation between TCL and KMBA is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding TCL MULTIMEDIA TECH and SK TELECOM TDADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK TELECOM TDADR and TCL MULTIMEDIA 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 TCL MULTIMEDIA TECH 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 TDADR has no effect on the direction of TCL MULTIMEDIA i.e., TCL MULTIMEDIA and SK TELECOM go up and down completely randomly.

Pair Corralation between TCL MULTIMEDIA and SK TELECOM

Assuming the 90 days trading horizon TCL MULTIMEDIA TECH is expected to generate 1.38 times more return on investment than SK TELECOM. However, TCL MULTIMEDIA is 1.38 times more volatile than SK TELECOM TDADR. It trades about 0.12 of its potential returns per unit of risk. SK TELECOM TDADR is currently generating about -0.01 per unit of risk. If you would invest  88.00  in TCL MULTIMEDIA TECH on April 20, 2025 and sell it today you would earn a total of  23.00  from holding TCL MULTIMEDIA TECH or generate 26.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

TCL MULTIMEDIA TECH  vs.  SK TELECOM TDADR

TCL MULTIMEDIA TECH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TCL MULTIMEDIA TECH are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, TCL MULTIMEDIA unveiled solid returns over the last few months and may actually be approaching a breakup point.

SK TELECOM TDADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days SK TELECOM TDADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, SK TELECOM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TCL MULTIMEDIA and SK TELECOM

The main advantage of trading using opposite TCL MULTIMEDIA and SK TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCL MULTIMEDIA 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 TCL MULTIMEDIA TECH and SK TELECOM TDADR 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.