Correlation Between SK Hynix and Woori Financial
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Woori Financial 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 Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Woori Financial Group, you can compare the effects of market volatilities on SK Hynix and Woori Financial 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 Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Woori Financial.
Diversification Opportunities for SK Hynix and Woori Financial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 000660 and Woori is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group 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 Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of SK Hynix i.e., SK Hynix and Woori Financial go up and down completely randomly.
Pair Corralation between SK Hynix and Woori Financial
Assuming the 90 days trading horizon SK Hynix is expected to generate 2.14 times more return on investment than Woori Financial. However, SK Hynix is 2.14 times more volatile than Woori Financial Group. It trades about 0.04 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.05 per unit of risk. If you would invest 17,121,600 in SK Hynix on November 7, 2024 and sell it today you would earn a total of 1,988,400 from holding SK Hynix or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. Woori Financial Group
Performance |
| Timeline |
| SK Hynix |
| Woori Financial Group |
SK Hynix and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Woori Financial
The main advantage of trading using opposite SK Hynix and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial's long position.| SK Hynix vs. Jahwa Electronics Co | SK Hynix vs. Korea Electronic Certification | SK Hynix vs. Daishin Information Communications | SK Hynix vs. Alton Sports CoLtd |
| Woori Financial vs. Shinsegae Food | Woori Financial vs. Foodnamoo | Woori Financial vs. Nice Information Telecommunication | Woori Financial vs. Asiana Airlines |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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