Correlation Between SK Hynix and SH Energy
Can any of the company-specific risk be diversified away by investing in both SK Hynix and SH Energy 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 Hynix and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and SH Energy Chemical, you can compare the effects of market volatilities on SK Hynix and SH Energy 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 Hynix with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and SH Energy.
Diversification Opportunities for SK Hynix and SH Energy
Significant diversification
The 3 months correlation between 000660 and 002360 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and SK Hynix 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 Hynix are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of SK Hynix i.e., SK Hynix and SH Energy go up and down completely randomly.
Pair Corralation between SK Hynix and SH Energy
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the SH Energy. But the stock apears to be less risky and, when comparing its historical volatility, SK Hynix is 1.54 times less risky than SH Energy. The stock trades about -0.16 of its potential returns per unit of risk. The SH Energy Chemical is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 55,000 in SH Energy Chemical on September 12, 2024 and sell it today you would lose (3,200) from holding SH Energy Chemical or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. SH Energy Chemical
Performance |
| Timeline |
| SK Hynix |
| SH Energy Chemical |
SK Hynix and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and SH Energy
The main advantage of trading using opposite SK Hynix and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| SH Energy vs. Samsung Electronics Co | SH Energy vs. Samsung Electronics Co | SH Energy vs. SK Hynix | SH Energy vs. POSCO Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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