Correlation Between SK Telecom and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both SK Telecom and Ultrapar Participacoes 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 Ultrapar Participacoes 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 Ultrapar Participacoes SA, you can compare the effects of market volatilities on SK Telecom and Ultrapar Participacoes 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 Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Telecom and Ultrapar Participacoes.
Diversification Opportunities for SK Telecom and Ultrapar Participacoes
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SKM and Ultrapar is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SK Telecom Co and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes 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 Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of SK Telecom i.e., SK Telecom and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between SK Telecom and Ultrapar Participacoes
Considering the 90-day investment horizon SK Telecom Co is expected to generate 0.64 times more return on investment than Ultrapar Participacoes. However, SK Telecom Co is 1.56 times less risky than Ultrapar Participacoes. It trades about 0.1 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about 0.03 per unit of risk. If you would invest 2,056 in SK Telecom Co on May 7, 2025 and sell it today you would earn a total of 187.00 from holding SK Telecom Co or generate 9.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SK Telecom Co vs. Ultrapar Participacoes SA
Performance |
Timeline |
SK Telecom |
Ultrapar Participacoes |
SK Telecom and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SK Telecom and Ultrapar Participacoes
The main advantage of trading using opposite SK Telecom and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Telecom position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.SK Telecom vs. KT Corporation | SK Telecom vs. PLDT Inc ADR | SK Telecom vs. Telefonica Brasil SA | SK Telecom vs. TIM Participacoes SA |
Ultrapar Participacoes vs. Cosan SA ADR | Ultrapar Participacoes vs. Neste Oyj | Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Valvoline |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Commodity Directory Find actively traded commodities issued by global exchanges |