Correlation Between SK Hynix and Mirai Semiconductors
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Mirai Semiconductors 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 Mirai Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Mirai Semiconductors Co, you can compare the effects of market volatilities on SK Hynix and Mirai Semiconductors 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 Mirai Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Mirai Semiconductors.
Diversification Opportunities for SK Hynix and Mirai Semiconductors
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 000660 and Mirai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Mirai Semiconductors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirai Semiconductors 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 Mirai Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirai Semiconductors has no effect on the direction of SK Hynix i.e., SK Hynix and Mirai Semiconductors go up and down completely randomly.
Pair Corralation between SK Hynix and Mirai Semiconductors
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.72 times more return on investment than Mirai Semiconductors. However, SK Hynix is 1.39 times less risky than Mirai Semiconductors. It trades about -0.12 of its potential returns per unit of risk. Mirai Semiconductors Co is currently generating about -0.14 per unit of risk. If you would invest 18,580,000 in SK Hynix on September 13, 2024 and sell it today you would lose (1,400,000) from holding SK Hynix or give up 7.53% 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. Mirai Semiconductors Co
Performance |
| Timeline |
| SK Hynix |
| Mirai Semiconductors |
SK Hynix and Mirai Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Mirai Semiconductors
The main advantage of trading using opposite SK Hynix and Mirai Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Mirai Semiconductors 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 Mirai Semiconductors will offset losses from the drop in Mirai Semiconductors' long position.| SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
| Mirai Semiconductors vs. Samsung Electronics Co | Mirai Semiconductors vs. Samsung Electronics Co | Mirai Semiconductors vs. LG Energy Solution | Mirai Semiconductors vs. SK Hynix |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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