Correlation Between SK Hynix and Techwing
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Techwing 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 Techwing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Techwing, you can compare the effects of market volatilities on SK Hynix and Techwing 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 Techwing. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Techwing.
Diversification Opportunities for SK Hynix and Techwing
Poor diversification
The 3 months correlation between 000660 and Techwing is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Techwing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techwing 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 Techwing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techwing has no effect on the direction of SK Hynix i.e., SK Hynix and Techwing go up and down completely randomly.
Pair Corralation between SK Hynix and Techwing
Assuming the 90 days trading horizon SK Hynix is expected to generate 2.54 times less return on investment than Techwing. But when comparing it to its historical volatility, SK Hynix is 1.37 times less risky than Techwing. It trades about 0.24 of its potential returns per unit of risk. Techwing is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 3,435,000 in Techwing on October 14, 2024 and sell it today you would earn a total of 1,595,000 from holding Techwing or generate 46.43% 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. Techwing
Performance |
| Timeline |
| SK Hynix |
| Techwing |
SK Hynix and Techwing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Techwing
The main advantage of trading using opposite SK Hynix and Techwing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Techwing 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 Techwing will offset losses from the drop in Techwing's long position.| SK Hynix vs. Finebesteel | SK Hynix vs. Fine Besteel Co | SK Hynix vs. Samsung Life Insurance | SK Hynix vs. CU Medical Systems |
| Techwing vs. Samsung Electronics Co | Techwing vs. Samsung Electronics Co | Techwing vs. LG Energy Solution | Techwing 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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