Correlation Between SK Hynix and Cheil Worldwide
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Cheil Worldwide 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 Cheil Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Cheil Worldwide, you can compare the effects of market volatilities on SK Hynix and Cheil Worldwide 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 Cheil Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Cheil Worldwide.
Diversification Opportunities for SK Hynix and Cheil Worldwide
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 000660 and Cheil is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Cheil Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheil Worldwide 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 Cheil Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheil Worldwide has no effect on the direction of SK Hynix i.e., SK Hynix and Cheil Worldwide go up and down completely randomly.
Pair Corralation between SK Hynix and Cheil Worldwide
Assuming the 90 days trading horizon SK Hynix is expected to generate 4.88 times less return on investment than Cheil Worldwide. In addition to that, SK Hynix is 2.94 times more volatile than Cheil Worldwide. It trades about 0.03 of its total potential returns per unit of risk. Cheil Worldwide is currently generating about 0.38 per unit of volatility. If you would invest 1,718,000 in Cheil Worldwide on November 28, 2024 and sell it today you would earn a total of 101,000 from holding Cheil Worldwide or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Cheil Worldwide
Performance |
| Timeline |
| SK Hynix |
| Cheil Worldwide |
SK Hynix and Cheil Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Cheil Worldwide
The main advantage of trading using opposite SK Hynix and Cheil Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Cheil Worldwide 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 Cheil Worldwide will offset losses from the drop in Cheil Worldwide's long position.| SK Hynix vs. Daejoo Electronic Materials | SK Hynix vs. Hana Materials | SK Hynix vs. INNOX Advanced Materials | SK Hynix vs. Lake Materials Co |
| Cheil Worldwide vs. Com2uS | Cheil Worldwide vs. NEOWIZ | Cheil Worldwide vs. Wemade CoLtd | Cheil Worldwide vs. Busan Industrial Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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