Correlation Between SK Hynix and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Samsung Electronics Co, you can compare the effects of market volatilities on SK Hynix and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Samsung Electronics.
Diversification Opportunities for SK Hynix and Samsung Electronics
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between 000660 and Samsung is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of SK Hynix i.e., SK Hynix and Samsung Electronics go up and down completely randomly.
Pair Corralation between SK Hynix and Samsung Electronics
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.25 times more return on investment than Samsung Electronics. However, SK Hynix is 1.25 times more volatile than Samsung Electronics Co. It trades about -0.01 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.08 per unit of risk. If you would invest 18,380,000 in SK Hynix on August 28, 2024 and sell it today you would lose (670,000) from holding SK Hynix or give up 3.65% 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. Samsung Electronics Co
Performance |
| Timeline |
| SK Hynix |
| Samsung Electronics |
SK Hynix and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Samsung Electronics
The main advantage of trading using opposite SK Hynix and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| SK Hynix vs. Korea Real Estate | SK Hynix vs. Korea Ratings Co | SK Hynix vs. IQuest Co | SK Hynix vs. Wonbang Tech Co |
| Samsung Electronics vs. Lotte Fine Chemical | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. Hansol Chemical Co | Samsung Electronics vs. Youngchang Chemical Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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