Correlation Between SK Hynix and JLK
Can any of the company-specific risk be diversified away by investing in both SK Hynix and JLK 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 JLK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and JLK Inc, you can compare the effects of market volatilities on SK Hynix and JLK 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 JLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and JLK.
Diversification Opportunities for SK Hynix and JLK
Very weak diversification
The 3 months correlation between 000660 and JLK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and JLK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLK Inc 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 JLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLK Inc has no effect on the direction of SK Hynix i.e., SK Hynix and JLK go up and down completely randomly.
Pair Corralation between SK Hynix and JLK
Assuming the 90 days trading horizon SK Hynix is expected to generate 0.99 times more return on investment than JLK. However, SK Hynix is 1.01 times less risky than JLK. It trades about 0.31 of its potential returns per unit of risk. JLK Inc is currently generating about -0.06 per unit of risk. If you would invest 17,500,000 in SK Hynix on October 20, 2024 and sell it today you would earn a total of 3,950,000 from holding SK Hynix or generate 22.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
SK Hynix vs. JLK Inc
Performance |
| Timeline |
| SK Hynix |
| JLK Inc |
SK Hynix and JLK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and JLK
The main advantage of trading using opposite SK Hynix and JLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, JLK 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 JLK will offset losses from the drop in JLK's long position.| SK Hynix vs. SV Investment | SK Hynix vs. Leaders Technology Investment | SK Hynix vs. Shinhan Financial Group | SK Hynix vs. Woori Financial Group |
| JLK vs. Samsung Electronics Co | JLK vs. Samsung Electronics Co | JLK vs. LG Energy Solution | JLK 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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