Correlation Between SK Hynix and Hyundai Green
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Hyundai Green 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 Hyundai Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and Hyundai Green Food, you can compare the effects of market volatilities on SK Hynix and Hyundai Green 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 Hyundai Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Hyundai Green.
Diversification Opportunities for SK Hynix and Hyundai Green
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between 000660 and Hyundai is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food 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 Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of SK Hynix i.e., SK Hynix and Hyundai Green go up and down completely randomly.
Pair Corralation between SK Hynix and Hyundai Green
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.82 times more return on investment than Hyundai Green. However, SK Hynix is 1.82 times more volatile than Hyundai Green Food. It trades about 0.46 of its potential returns per unit of risk. Hyundai Green Food is currently generating about -0.21 per unit of risk. If you would invest 16,850,000 in SK Hynix on October 25, 2024 and sell it today you would earn a total of 5,700,000 from holding SK Hynix or generate 33.83% 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. Hyundai Green Food
Performance |
| Timeline |
| SK Hynix |
| Hyundai Green Food |
SK Hynix and Hyundai Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Hyundai Green
The main advantage of trading using opposite SK Hynix and Hyundai Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Hyundai Green 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 Hyundai Green will offset losses from the drop in Hyundai Green's long position.| SK Hynix vs. NICE Information Service | SK Hynix vs. Mgame Corp | SK Hynix vs. ITM Semiconductor Co | SK Hynix vs. Clean Science co |
| Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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