Correlation Between SK Hynix and LG Innotek
Can any of the company-specific risk be diversified away by investing in both SK Hynix and LG Innotek 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 LG Innotek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and LG Innotek Co, you can compare the effects of market volatilities on SK Hynix and LG Innotek 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 LG Innotek. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and LG Innotek.
Diversification Opportunities for SK Hynix and LG Innotek
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 000660 and 011070 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and LG Innotek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Innotek 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 LG Innotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Innotek has no effect on the direction of SK Hynix i.e., SK Hynix and LG Innotek go up and down completely randomly.
Pair Corralation between SK Hynix and LG Innotek
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.06 times more return on investment than LG Innotek. However, SK Hynix is 1.06 times more volatile than LG Innotek Co. It trades about -0.05 of its potential returns per unit of risk. LG Innotek Co is currently generating about -0.16 per unit of risk. If you would invest 18,750,000 in SK Hynix on September 13, 2024 and sell it today you would lose (1,570,000) from holding SK Hynix or give up 8.37% 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. LG Innotek Co
Performance |
| Timeline |
| SK Hynix |
| LG Innotek |
SK Hynix and LG Innotek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and LG Innotek
The main advantage of trading using opposite SK Hynix and LG Innotek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, LG Innotek 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 LG Innotek will offset losses from the drop in LG Innotek's long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| LG Innotek vs. FOODWELL Co | LG Innotek vs. Sam Yang Foods | LG Innotek vs. Ecoplastic | LG Innotek vs. LS Materials |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |