Correlation Between SK Hynix and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both SK Hynix and SGA Solutions 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 SGA Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and SGA Solutions CoLtd, you can compare the effects of market volatilities on SK Hynix and SGA Solutions 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 SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and SGA Solutions.
Diversification Opportunities for SK Hynix and SGA Solutions
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 000660 and SGA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions 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 SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of SK Hynix i.e., SK Hynix and SGA Solutions go up and down completely randomly.
Pair Corralation between SK Hynix and SGA Solutions
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the SGA Solutions. In addition to that, SK Hynix is 1.53 times more volatile than SGA Solutions CoLtd. It trades about -0.05 of its total potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.08 per unit of volatility. If you would invest 47,900 in SGA Solutions CoLtd on November 7, 2024 and sell it today you would earn a total of 1,300 from holding SGA Solutions CoLtd or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SK Hynix vs. SGA Solutions CoLtd
Performance |
| Timeline |
| SK Hynix |
| SGA Solutions CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
SK Hynix and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and SGA Solutions
The main advantage of trading using opposite SK Hynix and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.| SK Hynix vs. Dongbang Transport Logistics | SK Hynix vs. Choil Aluminum | SK Hynix vs. Ewon Comfortech Co | SK Hynix vs. Dongnam Chemical Co |
| SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Hyundai Motor Co | SGA Solutions vs. LG Electronics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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