Correlation Between SK Hynix and Hyundai
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Hyundai 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 Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Hyundai Motor Co, you can compare the effects of market volatilities on SK Hynix and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Hyundai.
Diversification Opportunities for SK Hynix and Hyundai
Very good diversification
The 3 months correlation between 000660 and Hyundai is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of SK Hynix i.e., SK Hynix and Hyundai go up and down completely randomly.
Pair Corralation between SK Hynix and Hyundai
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Hyundai. In addition to that, SK Hynix is 1.68 times more volatile than Hyundai Motor Co. It trades about -0.22 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.16 per unit of volatility. If you would invest 17,500,000 in Hyundai Motor Co on August 24, 2024 and sell it today you would lose (1,120,000) from holding Hyundai Motor Co or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Hyundai Motor Co
Performance |
| Timeline |
| SK Hynix |
| Hyundai Motor |
SK Hynix and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Hyundai
The main advantage of trading using opposite SK Hynix and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| SK Hynix vs. Kaonmedia Co | SK Hynix vs. Jin Air Co | SK Hynix vs. Daewon Media Co | SK Hynix vs. SM Entertainment Co |
| Hyundai vs. Gyeongnam Steel Co | Hyundai vs. LG Household Healthcare | Hyundai vs. Wonil Special Steel | Hyundai vs. Hanil Iron Steel |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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