Correlation Between SK Hynix and Derkwoo Electronics
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Derkwoo Electronics 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 Derkwoo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Derkwoo Electronics Co, you can compare the effects of market volatilities on SK Hynix and Derkwoo Electronics 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 Derkwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Derkwoo Electronics.
Diversification Opportunities for SK Hynix and Derkwoo Electronics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 000660 and Derkwoo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Derkwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derkwoo Electronics 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 Derkwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derkwoo Electronics has no effect on the direction of SK Hynix i.e., SK Hynix and Derkwoo Electronics go up and down completely randomly.
Pair Corralation between SK Hynix and Derkwoo Electronics
Assuming the 90 days trading horizon SK Hynix is expected to generate 3.24 times more return on investment than Derkwoo Electronics. However, SK Hynix is 3.24 times more volatile than Derkwoo Electronics Co. It trades about -0.05 of its potential returns per unit of risk. Derkwoo Electronics Co is currently generating about -0.34 per unit of risk. If you would invest 19,980,000 in SK Hynix on November 7, 2024 and sell it today you would lose (870,000) from holding SK Hynix or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
SK Hynix vs. Derkwoo Electronics Co
Performance |
| Timeline |
| SK Hynix |
| Derkwoo Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SK Hynix and Derkwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Derkwoo Electronics
The main advantage of trading using opposite SK Hynix and Derkwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Derkwoo Electronics 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 Derkwoo Electronics will offset losses from the drop in Derkwoo Electronics' 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 |
| Derkwoo Electronics vs. Samsung Electronics Co | Derkwoo Electronics vs. Samsung Electronics Co | Derkwoo Electronics vs. SK Hynix | Derkwoo Electronics vs. LG Chem |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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