Correlation Between SK Hynix and Hironic Co
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Hironic Co 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 Hironic Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Hironic Co, you can compare the effects of market volatilities on SK Hynix and Hironic Co 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 Hironic Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Hironic Co.
Diversification Opportunities for SK Hynix and Hironic Co
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 000660 and Hironic is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Hironic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hironic Co 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 Hironic Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hironic Co has no effect on the direction of SK Hynix i.e., SK Hynix and Hironic Co go up and down completely randomly.
Pair Corralation between SK Hynix and Hironic Co
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.81 times more return on investment than Hironic Co. However, SK Hynix is 1.23 times less risky than Hironic Co. It trades about 0.05 of its potential returns per unit of risk. Hironic Co is currently generating about 0.01 per unit of risk. If you would invest 13,052,100 in SK Hynix on September 14, 2024 and sell it today you would earn a total of 4,557,900 from holding SK Hynix or generate 34.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Hironic Co
Performance |
| Timeline |
| SK Hynix |
| Hironic Co |
SK Hynix and Hironic Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Hironic Co
The main advantage of trading using opposite SK Hynix and Hironic Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Hironic Co 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 Hironic Co will offset losses from the drop in Hironic Co's long position.| SK Hynix vs. Daou Technology | SK Hynix vs. CU Tech Corp | SK Hynix vs. HB Technology TD | SK Hynix vs. Yura Tech Co |
| Hironic Co vs. Samsung Electronics Co | Hironic Co vs. Samsung Electronics Co | Hironic Co vs. SK Hynix | Hironic Co vs. SK Holdings Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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