Correlation Between SK Hynix and BBC
Can any of the company-specific risk be diversified away by investing in both SK Hynix and BBC 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 BBC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and BBC Co, you can compare the effects of market volatilities on SK Hynix and BBC 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 BBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and BBC.
Diversification Opportunities for SK Hynix and BBC
Excellent diversification
The 3 months correlation between 000660 and BBC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and BBC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBC Co 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 BBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBC Co has no effect on the direction of SK Hynix i.e., SK Hynix and BBC go up and down completely randomly.
Pair Corralation between SK Hynix and BBC
Assuming the 90 days trading horizon SK Hynix is expected to under-perform the BBC. In addition to that, SK Hynix is 1.78 times more volatile than BBC Co. It trades about -0.14 of its total potential returns per unit of risk. BBC Co is currently generating about -0.01 per unit of volatility. If you would invest 824,000 in BBC Co on August 29, 2024 and sell it today you would lose (7,000) from holding BBC Co or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. BBC Co
Performance |
| Timeline |
| SK Hynix |
| BBC Co |
SK Hynix and BBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and BBC
The main advantage of trading using opposite SK Hynix and BBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, BBC 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 BBC will offset losses from the drop in BBC's long position.| SK Hynix vs. Finebesteel | SK Hynix vs. Gyeongnam Steel Co | SK Hynix vs. Jeil Steel Mfg | SK Hynix vs. Echomarketing CoLtd |
| BBC vs. Air Busan Co | BBC vs. Cloud Air CoLtd | BBC vs. iNtRON Biotechnology | BBC vs. Lindeman Asia Investment |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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