Correlation Between SK Hynix and Anam Electronics
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Anam 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 Anam 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 Anam Electronics Co, you can compare the effects of market volatilities on SK Hynix and Anam 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 Anam Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Anam Electronics.
Diversification Opportunities for SK Hynix and Anam Electronics
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 000660 and Anam is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Anam Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anam 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 Anam Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anam Electronics has no effect on the direction of SK Hynix i.e., SK Hynix and Anam Electronics go up and down completely randomly.
Pair Corralation between SK Hynix and Anam Electronics
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Anam Electronics. But the stock apears to be less risky and, when comparing its historical volatility, SK Hynix is 1.48 times less risky than Anam Electronics. The stock trades about -0.12 of its potential returns per unit of risk. The Anam Electronics Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 120,000 in Anam Electronics Co on September 13, 2024 and sell it today you would earn a total of 9,100 from holding Anam Electronics Co or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Anam Electronics Co
Performance |
| Timeline |
| SK Hynix |
| Anam Electronics |
SK Hynix and Anam Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Anam Electronics
The main advantage of trading using opposite SK Hynix and Anam Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Anam 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 Anam Electronics will offset losses from the drop in Anam Electronics' long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| Anam Electronics vs. Samsung Electronics Co | Anam Electronics vs. Samsung Electronics Co | Anam Electronics vs. SK Hynix | Anam Electronics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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