Correlation Between SK Hynix and Sungwoo Electronics
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Sungwoo Electronics 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 Sungwoo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Sungwoo Electronics Co, you can compare the effects of market volatilities on SK Hynix and Sungwoo Electronics 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 Sungwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Sungwoo Electronics.
Diversification Opportunities for SK Hynix and Sungwoo Electronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 000660 and Sungwoo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Sungwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Electronics 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 Sungwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Electronics has no effect on the direction of SK Hynix i.e., SK Hynix and Sungwoo Electronics go up and down completely randomly.
Pair Corralation between SK Hynix and Sungwoo Electronics
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.01 times more return on investment than Sungwoo Electronics. However, SK Hynix is 1.01 times more volatile than Sungwoo Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Sungwoo Electronics Co is currently generating about 0.04 per unit of risk. If you would invest 7,553,024 in SK Hynix on September 14, 2024 and sell it today you would earn a total of 10,056,976 from holding SK Hynix or generate 133.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.63% |
| Values | Daily Returns |
SK Hynix vs. Sungwoo Electronics Co
Performance |
| Timeline |
| SK Hynix |
| Sungwoo Electronics |
SK Hynix and Sungwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Sungwoo Electronics
The main advantage of trading using opposite SK Hynix and Sungwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Sungwoo Electronics 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 Sungwoo Electronics will offset losses from the drop in Sungwoo Electronics' long position.| SK Hynix vs. Daou Technology | SK Hynix vs. CU Tech Corp | SK Hynix vs. HB Technology TD | SK Hynix vs. Yura Tech Co |
| Sungwoo Electronics vs. Samsung Electronics Co | Sungwoo Electronics vs. Samsung Electronics Co | Sungwoo Electronics vs. SK Hynix | Sungwoo Electronics vs. POSCO Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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