Correlation Between SK Hynix and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Daiyang Metal 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 Daiyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Daiyang Metal Co, you can compare the effects of market volatilities on SK Hynix and Daiyang Metal 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 Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Daiyang Metal.
Diversification Opportunities for SK Hynix and Daiyang Metal
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 000660 and Daiyang is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal 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 Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of SK Hynix i.e., SK Hynix and Daiyang Metal go up and down completely randomly.
Pair Corralation between SK Hynix and Daiyang Metal
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.49 times more return on investment than Daiyang Metal. However, SK Hynix is 2.03 times less risky than Daiyang Metal. It trades about 0.06 of its potential returns per unit of risk. Daiyang Metal Co is currently generating about -0.01 per unit of risk. If you would invest 11,532,500 in SK Hynix on September 12, 2024 and sell it today you would earn a total of 5,507,500 from holding SK Hynix or generate 47.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.43% |
| Values | Daily Returns |
SK Hynix vs. Daiyang Metal Co
Performance |
| Timeline |
| SK Hynix |
| Daiyang Metal |
SK Hynix and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Daiyang Metal
The main advantage of trading using opposite SK Hynix and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| Daiyang Metal vs. Samsung Electronics Co | Daiyang Metal vs. Samsung Electronics Co | Daiyang Metal vs. SK Hynix | Daiyang Metal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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