Correlation Between SK Hynix and SEOWONINTECHCoLtd
Can any of the company-specific risk be diversified away by investing in both SK Hynix and SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and SEOWONINTECHCoLtd, you can compare the effects of market volatilities on SK Hynix and SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and SEOWONINTECHCoLtd.
Diversification Opportunities for SK Hynix and SEOWONINTECHCoLtd
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 000660 and SEOWONINTECHCoLtd is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and SEOWONINTECHCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOWONINTECHCoLtd has no effect on the direction of SK Hynix i.e., SK Hynix and SEOWONINTECHCoLtd go up and down completely randomly.
Pair Corralation between SK Hynix and SEOWONINTECHCoLtd
Assuming the 90 days trading horizon SK Hynix is expected to generate 2.43 times more return on investment than SEOWONINTECHCoLtd. However, SK Hynix is 2.43 times more volatile than SEOWONINTECHCoLtd. It trades about 0.08 of its potential returns per unit of risk. SEOWONINTECHCoLtd is currently generating about 0.02 per unit of risk. If you would invest 8,774,113 in SK Hynix on October 28, 2024 and sell it today you would earn a total of 13,325,887 from holding SK Hynix or generate 151.88% 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. SEOWONINTECHCoLtd
Performance |
| Timeline |
| SK Hynix |
| SEOWONINTECHCoLtd |
SK Hynix and SEOWONINTECHCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and SEOWONINTECHCoLtd
The main advantage of trading using opposite SK Hynix and SEOWONINTECHCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd will offset losses from the drop in SEOWONINTECHCoLtd's long position.| SK Hynix vs. Hankuk Steel Wire | SK Hynix vs. Nam Hwa Construction | SK Hynix vs. Dongwoo Farm To | SK Hynix vs. Kyeryong Construction Industrial |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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