Correlation Between SK Hynix and PC Direct
Can any of the company-specific risk be diversified away by investing in both SK Hynix and PC Direct 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 PC Direct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and PC Direct, you can compare the effects of market volatilities on SK Hynix and PC Direct 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 PC Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and PC Direct.
Diversification Opportunities for SK Hynix and PC Direct
Poor diversification
The 3 months correlation between 000660 and 051380 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and PC Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Direct 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 PC Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Direct has no effect on the direction of SK Hynix i.e., SK Hynix and PC Direct go up and down completely randomly.
Pair Corralation between SK Hynix and PC Direct
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.82 times more return on investment than PC Direct. However, SK Hynix is 1.21 times less risky than PC Direct. It trades about 0.08 of its potential returns per unit of risk. PC Direct is currently generating about 0.04 per unit of risk. If you would invest 15,584,100 in SK Hynix on November 3, 2024 and sell it today you would earn a total of 4,335,900 from holding SK Hynix or generate 27.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. PC Direct
Performance |
| Timeline |
| SK Hynix |
| PC Direct |
SK Hynix and PC Direct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and PC Direct
The main advantage of trading using opposite SK Hynix and PC Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, PC Direct 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 PC Direct will offset losses from the drop in PC Direct's long position.| SK Hynix vs. LEENO Industrial | SK Hynix vs. Pan Entertainment Co | SK Hynix vs. SKONEC Entertainment Co | SK Hynix vs. YG Entertainment |
| PC Direct vs. KTB Investment Securities | PC Direct vs. AeroSpace Technology of | PC Direct vs. Hanjin Transportation Co | PC Direct vs. LG Household Healthcare |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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