Correlation Between SK Hynix and J Steel
Can any of the company-specific risk be diversified away by investing in both SK Hynix and J Steel 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 J Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and J Steel Co, you can compare the effects of market volatilities on SK Hynix and J Steel 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 J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and J Steel.
Diversification Opportunities for SK Hynix and J Steel
Very good diversification
The 3 months correlation between 000660 and 023440 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel 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 J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of SK Hynix i.e., SK Hynix and J Steel go up and down completely randomly.
Pair Corralation between SK Hynix and J Steel
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.69 times more return on investment than J Steel. However, SK Hynix is 1.69 times more volatile than J Steel Co. It trades about 0.37 of its potential returns per unit of risk. J Steel Co is currently generating about -0.22 per unit of risk. If you would invest 16,960,000 in SK Hynix on October 23, 2024 and sell it today you would earn a total of 4,240,000 from holding SK Hynix or generate 25.0% 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. J Steel Co
Performance |
| Timeline |
| SK Hynix |
| J Steel |
SK Hynix and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and J Steel
The main advantage of trading using opposite SK Hynix and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, J Steel 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 J Steel will offset losses from the drop in J Steel's long position.| SK Hynix vs. EV Advanced Material | SK Hynix vs. WONIK Materials CoLtd | SK Hynix vs. Hironic Co | SK Hynix vs. Ssangyong Materials Corp |
| J Steel vs. SAMG Entertainment Co | J Steel vs. Nable Communications | J Steel vs. Korea Computer | J Steel vs. ChipsMedia |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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