Correlation Between SK Hynix and Seojin System
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Seojin System 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 Seojin System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Seojin System CoLtd, you can compare the effects of market volatilities on SK Hynix and Seojin System 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 Seojin System. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Seojin System.
Diversification Opportunities for SK Hynix and Seojin System
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 000660 and Seojin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Seojin System CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin System CoLtd 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 Seojin System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin System CoLtd has no effect on the direction of SK Hynix i.e., SK Hynix and Seojin System go up and down completely randomly.
Pair Corralation between SK Hynix and Seojin System
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the Seojin System. But the stock apears to be less risky and, when comparing its historical volatility, SK Hynix is 1.08 times less risky than Seojin System. The stock trades about -0.03 of its potential returns per unit of risk. The Seojin System CoLtd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,905,000 in Seojin System CoLtd on September 3, 2024 and sell it today you would lose (360,000) from holding Seojin System CoLtd or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Seojin System CoLtd
Performance |
| Timeline |
| SK Hynix |
| Seojin System CoLtd |
SK Hynix and Seojin System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Seojin System
The main advantage of trading using opposite SK Hynix and Seojin System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Seojin System 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 Seojin System will offset losses from the drop in Seojin System's long position.| SK Hynix vs. Haitai Confectionery Foods | SK Hynix vs. Dongkuk Structures Construction | SK Hynix vs. Tuksu Engineering ConstructionLtd | SK Hynix vs. Camus Engineering Construction |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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