Correlation Between SK Hynix and DataSolution
Can any of the company-specific risk be diversified away by investing in both SK Hynix and DataSolution 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 DataSolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and DataSolution, you can compare the effects of market volatilities on SK Hynix and DataSolution 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 DataSolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and DataSolution.
Diversification Opportunities for SK Hynix and DataSolution
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 000660 and DataSolution is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution 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 DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of SK Hynix i.e., SK Hynix and DataSolution go up and down completely randomly.
Pair Corralation between SK Hynix and DataSolution
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the DataSolution. But the stock apears to be less risky and, when comparing its historical volatility, SK Hynix is 1.1 times less risky than DataSolution. The stock trades about -0.14 of its potential returns per unit of risk. The DataSolution is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 433,500 in DataSolution on August 29, 2024 and sell it today you would earn a total of 60,500 from holding DataSolution or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. DataSolution
Performance |
| Timeline |
| SK Hynix |
| DataSolution |
SK Hynix and DataSolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and DataSolution
The main advantage of trading using opposite SK Hynix and DataSolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, DataSolution 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 DataSolution will offset losses from the drop in DataSolution's long position.| SK Hynix vs. Korea Real Estate | SK Hynix vs. Korea Ratings Co | SK Hynix vs. IQuest Co | SK Hynix vs. Wonbang Tech Co |
| DataSolution vs. Samsung Electronics Co | DataSolution vs. Samsung Electronics Co | DataSolution vs. LG Energy Solution | DataSolution 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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