Correlation Between SK Hynix and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Digital Imaging 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 Digital Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Digital Imaging Technology, you can compare the effects of market volatilities on SK Hynix and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Digital Imaging.
Diversification Opportunities for SK Hynix and Digital Imaging
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 000660 and Digital is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of SK Hynix i.e., SK Hynix and Digital Imaging go up and down completely randomly.
Pair Corralation between SK Hynix and Digital Imaging
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.77 times more return on investment than Digital Imaging. However, SK Hynix is 1.3 times less risky than Digital Imaging. It trades about -0.06 of its potential returns per unit of risk. Digital Imaging Technology is currently generating about -0.18 per unit of risk. If you would invest 18,490,000 in SK Hynix on September 5, 2024 and sell it today you would lose (1,690,000) from holding SK Hynix or give up 9.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Digital Imaging Technology
Performance |
| Timeline |
| SK Hynix |
| Digital Imaging Tech |
SK Hynix and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Digital Imaging
The main advantage of trading using opposite SK Hynix and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.| SK Hynix vs. Dongsin Engineering Construction | SK Hynix vs. Doosan Fuel Cell | SK Hynix vs. Daishin Balance 1 | SK Hynix vs. Total Soft Bank |
| Digital Imaging vs. SK Hynix | Digital Imaging vs. LX Semicon Co | Digital Imaging vs. People Technology | Digital Imaging vs. Hana Materials |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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