Correlation Between SK Hynix and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Mobile Appliance 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 Mobile Appliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Mobile Appliance, you can compare the effects of market volatilities on SK Hynix and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Mobile Appliance.
Diversification Opportunities for SK Hynix and Mobile Appliance
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 000660 and Mobile is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of SK Hynix i.e., SK Hynix and Mobile Appliance go up and down completely randomly.
Pair Corralation between SK Hynix and Mobile Appliance
Assuming the 90 days trading horizon SK Hynix is expected to generate 2.25 times more return on investment than Mobile Appliance. However, SK Hynix is 2.25 times more volatile than Mobile Appliance. It trades about 0.2 of its potential returns per unit of risk. Mobile Appliance is currently generating about 0.26 per unit of risk. If you would invest 17,120,000 in SK Hynix on November 3, 2024 and sell it today you would earn a total of 2,800,000 from holding SK Hynix or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Mobile Appliance
Performance |
| Timeline |
| SK Hynix |
| Mobile Appliance |
SK Hynix and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Mobile Appliance
The main advantage of trading using opposite SK Hynix and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.| SK Hynix vs. SK Telecom Co | SK Hynix vs. KMH Hitech Co | SK Hynix vs. Daishin Information Communications | SK Hynix vs. Vitzro Tech Co |
| Mobile Appliance vs. Nable Communications | Mobile Appliance vs. Daishin Information Communications | Mobile Appliance vs. Choil Aluminum | Mobile Appliance vs. Inzi Display 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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