Correlation Between SK Hynix and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Kukdong Oil 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 Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Kukdong Oil Chemicals, you can compare the effects of market volatilities on SK Hynix and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Kukdong Oil.
Diversification Opportunities for SK Hynix and Kukdong Oil
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 000660 and Kukdong is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of SK Hynix i.e., SK Hynix and Kukdong Oil go up and down completely randomly.
Pair Corralation between SK Hynix and Kukdong Oil
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Kukdong Oil. In addition to that, SK Hynix is 1.51 times more volatile than Kukdong Oil Chemicals. It trades about -0.18 of its total potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.19 per unit of volatility. If you would invest 372,500 in Kukdong Oil Chemicals on September 12, 2024 and sell it today you would lose (29,500) from holding Kukdong Oil Chemicals or give up 7.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| SK Hynix |
| Kukdong Oil Chemicals |
SK Hynix and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Kukdong Oil
The main advantage of trading using opposite SK Hynix and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| Kukdong Oil vs. Samsung Electronics Co | Kukdong Oil vs. Samsung Electronics Co | Kukdong Oil vs. SK Hynix | Kukdong Oil 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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