Correlation Between SK Hynix and Chin Yang
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Chin Yang 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 Chin Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Chin Yang Chemical, you can compare the effects of market volatilities on SK Hynix and Chin Yang 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 Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Chin Yang.
Diversification Opportunities for SK Hynix and Chin Yang
Average diversification
The 3 months correlation between 000660 and Chin is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical 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 Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of SK Hynix i.e., SK Hynix and Chin Yang go up and down completely randomly.
Pair Corralation between SK Hynix and Chin Yang
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Chin Yang. But the stock apears to be less risky and, when comparing its historical volatility, SK Hynix is 3.18 times less risky than Chin Yang. The stock trades about -0.12 of its potential returns per unit of risk. The Chin Yang Chemical is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 283,000 in Chin Yang Chemical on September 13, 2024 and sell it today you would earn a total of 105,000 from holding Chin Yang Chemical or generate 37.1% 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. Chin Yang Chemical
Performance |
| Timeline |
| SK Hynix |
| Chin Yang Chemical |
SK Hynix and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Chin Yang
The main advantage of trading using opposite SK Hynix and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| Chin Yang vs. Echomarketing CoLtd | Chin Yang vs. Mgame Corp | Chin Yang vs. National Plastic Co | Chin Yang vs. LS Materials |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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