Correlation Between SK Hynix and Assems
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Assems 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 Assems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Assems Inc, you can compare the effects of market volatilities on SK Hynix and Assems 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 Assems. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Assems.
Diversification Opportunities for SK Hynix and Assems
Poor diversification
The 3 months correlation between 000660 and Assems is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Assems Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assems Inc 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 Assems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assems Inc has no effect on the direction of SK Hynix i.e., SK Hynix and Assems go up and down completely randomly.
Pair Corralation between SK Hynix and Assems
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Assems. In addition to that, SK Hynix is 1.93 times more volatile than Assems Inc. It trades about -0.26 of its total potential returns per unit of risk. Assems Inc is currently generating about -0.44 per unit of volatility. If you would invest 805,000 in Assems Inc on August 31, 2024 and sell it today you would lose (125,000) from holding Assems Inc or give up 15.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SK Hynix vs. Assems Inc
Performance |
| Timeline |
| SK Hynix |
| Assems Inc |
SK Hynix and Assems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Assems
The main advantage of trading using opposite SK Hynix and Assems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Assems 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 Assems will offset losses from the drop in Assems' 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 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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