Correlation Between SK Hynix and FNSTech
Can any of the company-specific risk be diversified away by investing in both SK Hynix and FNSTech 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 FNSTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and FNSTech Co, you can compare the effects of market volatilities on SK Hynix and FNSTech 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 FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and FNSTech.
Diversification Opportunities for SK Hynix and FNSTech
Good diversification
The 3 months correlation between 000660 and FNSTech is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech 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 FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of SK Hynix i.e., SK Hynix and FNSTech go up and down completely randomly.
Pair Corralation between SK Hynix and FNSTech
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.78 times more return on investment than FNSTech. However, SK Hynix is 1.28 times less risky than FNSTech. It trades about 0.08 of its potential returns per unit of risk. FNSTech Co is currently generating about 0.02 per unit of risk. If you would invest 7,945,389 in SK Hynix on August 25, 2024 and sell it today you would earn a total of 9,724,611 from holding SK Hynix or generate 122.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SK Hynix vs. FNSTech Co
Performance |
| Timeline |
| SK Hynix |
| FNSTech |
SK Hynix and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and FNSTech
The main advantage of trading using opposite SK Hynix and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.| SK Hynix vs. Korea Real Estate | SK Hynix vs. Korea Ratings Co | SK Hynix vs. IQuest Co | SK Hynix vs. Wonbang Tech Co |
| FNSTech vs. Samsung Electronics Co | FNSTech vs. Samsung Electronics Co | FNSTech vs. LG Energy Solution | FNSTech vs. SK Hynix |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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