Correlation Between SK Hynix and EV Advanced
Can any of the company-specific risk be diversified away by investing in both SK Hynix and EV Advanced 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 EV Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and EV Advanced Material, you can compare the effects of market volatilities on SK Hynix and EV Advanced 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 EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and EV Advanced.
Diversification Opportunities for SK Hynix and EV Advanced
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 000660 and 131400 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material 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 EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of SK Hynix i.e., SK Hynix and EV Advanced go up and down completely randomly.
Pair Corralation between SK Hynix and EV Advanced
Assuming the 90 days trading horizon SK Hynix is expected to generate 2.17 times more return on investment than EV Advanced. However, SK Hynix is 2.17 times more volatile than EV Advanced Material. It trades about 0.01 of its potential returns per unit of risk. EV Advanced Material is currently generating about -0.35 per unit of risk. If you would invest 19,980,000 in SK Hynix on November 5, 2024 and sell it today you would lose (60,000) from holding SK Hynix or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. EV Advanced Material
Performance |
| Timeline |
| SK Hynix |
| EV Advanced Material |
SK Hynix and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and EV Advanced
The main advantage of trading using opposite SK Hynix and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.| SK Hynix vs. Sangsin Energy Display | SK Hynix vs. Daishin Information Communications | SK Hynix vs. GS Retail Co | SK Hynix vs. CU Medical Systems |
| EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Hyundai Motor Co | EV Advanced vs. Hyundai Motor |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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