Correlation Between SK Hynix and InfoBank
Can any of the company-specific risk be diversified away by investing in both SK Hynix and InfoBank 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 InfoBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and InfoBank, you can compare the effects of market volatilities on SK Hynix and InfoBank 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 InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and InfoBank.
Diversification Opportunities for SK Hynix and InfoBank
Significant diversification
The 3 months correlation between 000660 and InfoBank is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank 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 InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of SK Hynix i.e., SK Hynix and InfoBank go up and down completely randomly.
Pair Corralation between SK Hynix and InfoBank
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.8 times more return on investment than InfoBank. However, SK Hynix is 1.26 times less risky than InfoBank. It trades about 0.08 of its potential returns per unit of risk. InfoBank is currently generating about -0.01 per unit of risk. If you would invest 9,079,385 in SK Hynix on October 25, 2024 and sell it today you would earn a total of 12,870,615 from holding SK Hynix or generate 141.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. InfoBank
Performance |
| Timeline |
| SK Hynix |
| InfoBank |
SK Hynix and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and InfoBank
The main advantage of trading using opposite SK Hynix and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| SK Hynix vs. NICE Information Service | SK Hynix vs. Mgame Corp | SK Hynix vs. ITM Semiconductor Co | SK Hynix vs. Clean Science co |
| InfoBank vs. Samsung Electronics Co | InfoBank vs. Samsung Electronics Co | InfoBank vs. SK Hynix | InfoBank vs. HMM 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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