Correlation Between SK Hynix and Drb Industrial
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Drb Industrial 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 Drb Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Drb Industrial, you can compare the effects of market volatilities on SK Hynix and Drb Industrial 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 Drb Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Drb Industrial.
Diversification Opportunities for SK Hynix and Drb Industrial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 000660 and Drb is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Drb Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drb Industrial 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 Drb Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drb Industrial has no effect on the direction of SK Hynix i.e., SK Hynix and Drb Industrial go up and down completely randomly.
Pair Corralation between SK Hynix and Drb Industrial
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.09 times more return on investment than Drb Industrial. However, SK Hynix is 1.09 times more volatile than Drb Industrial. It trades about 0.29 of its potential returns per unit of risk. Drb Industrial is currently generating about 0.06 per unit of risk. If you would invest 15,990,000 in SK Hynix on October 30, 2024 and sell it today you would earn a total of 6,110,000 from holding SK Hynix or generate 38.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Drb Industrial
Performance |
| Timeline |
| SK Hynix |
| Drb Industrial |
SK Hynix and Drb Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Drb Industrial
The main advantage of trading using opposite SK Hynix and Drb Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Drb Industrial 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 Drb Industrial will offset losses from the drop in Drb Industrial's long position.| SK Hynix vs. Inzi Display CoLtd | SK Hynix vs. Sangsin Energy Display | SK Hynix vs. Dongwoo Farm To | SK Hynix vs. SEOJEON ELECTRIC MACHINERY |
| Drb Industrial vs. Daishin Information Communications | Drb Industrial vs. DAEDUCK ELECTRONICS CoLtd | Drb Industrial vs. Seoul Electronics Telecom | Drb Industrial vs. Samyoung Electronics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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