Correlation Between SK Hynix and STCube
Can any of the company-specific risk be diversified away by investing in both SK Hynix and STCube 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 STCube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and STCube Inc, you can compare the effects of market volatilities on SK Hynix and STCube 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 STCube. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and STCube.
Diversification Opportunities for SK Hynix and STCube
Poor diversification
The 3 months correlation between 000660 and STCube is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and STCube Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STCube Inc 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 STCube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STCube Inc has no effect on the direction of SK Hynix i.e., SK Hynix and STCube go up and down completely randomly.
Pair Corralation between SK Hynix and STCube
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.58 times more return on investment than STCube. However, SK Hynix is 1.71 times less risky than STCube. It trades about 0.04 of its potential returns per unit of risk. STCube Inc is currently generating about -0.02 per unit of risk. If you would invest 13,211,000 in SK Hynix on September 1, 2024 and sell it today you would earn a total of 2,779,000 from holding SK Hynix or generate 21.04% 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. STCube Inc
Performance |
| Timeline |
| SK Hynix |
| STCube Inc |
SK Hynix and STCube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and STCube
The main advantage of trading using opposite SK Hynix and STCube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, STCube 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 STCube will offset losses from the drop in STCube's long position.| SK Hynix vs. NH Investment Securities | SK Hynix vs. Kakao Games Corp | SK Hynix vs. Mgame Corp | SK Hynix vs. Jin Air Co |
| STCube vs. Shinhan Inverse Copper | STCube vs. Korea Investment Holdings | STCube vs. DONGKUK TED METAL | STCube vs. Heungkuk Metaltech CoLtd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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