Correlation Between SK Hynix and Deutsch Motors
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Deutsch Motors 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 Deutsch Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Deutsch Motors, you can compare the effects of market volatilities on SK Hynix and Deutsch Motors 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 Deutsch Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Deutsch Motors.
Diversification Opportunities for SK Hynix and Deutsch Motors
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 000660 and Deutsch is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Deutsch Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsch Motors 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 Deutsch Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsch Motors has no effect on the direction of SK Hynix i.e., SK Hynix and Deutsch Motors go up and down completely randomly.
Pair Corralation between SK Hynix and Deutsch Motors
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Deutsch Motors. In addition to that, SK Hynix is 1.24 times more volatile than Deutsch Motors. It trades about -0.12 of its total potential returns per unit of risk. Deutsch Motors is currently generating about 0.22 per unit of volatility. If you would invest 452,000 in Deutsch Motors on September 13, 2024 and sell it today you would earn a total of 49,000 from holding Deutsch Motors or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Deutsch Motors
Performance |
| Timeline |
| SK Hynix |
| Deutsch Motors |
SK Hynix and Deutsch Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Deutsch Motors
The main advantage of trading using opposite SK Hynix and Deutsch Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Deutsch Motors 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 Deutsch Motors will offset losses from the drop in Deutsch Motors' long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| Deutsch Motors vs. Samhyun Steel Co | Deutsch Motors vs. Seoam Machinery Industry | Deutsch Motors vs. Bookook Steel | Deutsch Motors vs. Finebesteel |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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