Correlation Between SK Hynix and KG Eco
Can any of the company-specific risk be diversified away by investing in both SK Hynix and KG Eco 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 KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and KG Eco Technology, you can compare the effects of market volatilities on SK Hynix and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and KG Eco.
Diversification Opportunities for SK Hynix and KG Eco
Very weak diversification
The 3 months correlation between 000660 and 151860 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of SK Hynix i.e., SK Hynix and KG Eco go up and down completely randomly.
Pair Corralation between SK Hynix and KG Eco
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.76 times more return on investment than KG Eco. However, SK Hynix is 1.76 times more volatile than KG Eco Technology. It trades about 0.37 of its potential returns per unit of risk. KG Eco Technology is currently generating about 0.26 per unit of risk. If you would invest 16,960,000 in SK Hynix on October 23, 2024 and sell it today you would earn a total of 4,240,000 from holding SK Hynix or generate 25.0% 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. KG Eco Technology
Performance |
| Timeline |
| SK Hynix |
| KG Eco Technology |
SK Hynix and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and KG Eco
The main advantage of trading using opposite SK Hynix and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| SK Hynix vs. EV Advanced Material | SK Hynix vs. WONIK Materials CoLtd | SK Hynix vs. Hironic Co | SK Hynix vs. Ssangyong Materials Corp |
| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. SK Hynix | KG Eco vs. HMM 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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