Correlation Between SK Hynix and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Leaders Technology 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 Leaders Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Leaders Technology Investment, you can compare the effects of market volatilities on SK Hynix and Leaders Technology 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 Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Leaders Technology.
Diversification Opportunities for SK Hynix and Leaders Technology
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 000660 and Leaders is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology 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 Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of SK Hynix i.e., SK Hynix and Leaders Technology go up and down completely randomly.
Pair Corralation between SK Hynix and Leaders Technology
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.47 times more return on investment than Leaders Technology. However, SK Hynix is 1.47 times more volatile than Leaders Technology Investment. It trades about 0.14 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about -0.06 per unit of risk. If you would invest 18,190,000 in SK Hynix on November 4, 2024 and sell it today you would earn a total of 1,730,000 from holding SK Hynix or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Leaders Technology Investment
Performance |
| Timeline |
| SK Hynix |
| Leaders Technology |
SK Hynix and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Leaders Technology
The main advantage of trading using opposite SK Hynix and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Leaders Technology 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| SK Hynix vs. Youngsin Metal Industrial | SK Hynix vs. Lion Chemtech Co | SK Hynix vs. Kukil Metal Co | SK Hynix vs. Duksan Hi Metal |
| Leaders Technology vs. Daishin Information Communications | Leaders Technology vs. Sung Bo Chemicals | Leaders Technology vs. Korea Information Engineering | Leaders Technology vs. Lotte Chilsung Beverage |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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