Correlation Between DB Financial and SK Hynix
Can any of the company-specific risk be diversified away by investing in both DB Financial and SK Hynix 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 DB Financial and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Financial Investment and SK Hynix, you can compare the effects of market volatilities on DB Financial and SK Hynix 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 DB Financial with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and SK Hynix.
Diversification Opportunities for DB Financial and SK Hynix
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 016610 and 000660 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and DB Financial 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 DB Financial Investment are associated (or correlated) with SK Hynix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Hynix has no effect on the direction of DB Financial i.e., DB Financial and SK Hynix go up and down completely randomly.
Pair Corralation between DB Financial and SK Hynix
Assuming the 90 days trading horizon DB Financial Investment is expected to under-perform the SK Hynix. But the stock apears to be less risky and, when comparing its historical volatility, DB Financial Investment is 1.78 times less risky than SK Hynix. The stock trades about 0.0 of its potential returns per unit of risk. The SK Hynix is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 18,750,000 in SK Hynix on October 14, 2024 and sell it today you would earn a total of 1,600,000 from holding SK Hynix or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. SK Hynix
Performance |
| Timeline |
| DB Financial Investment |
| SK Hynix |
DB Financial and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and SK Hynix
The main advantage of trading using opposite DB Financial and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, SK Hynix 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 SK Hynix will offset losses from the drop in SK Hynix's long position.| DB Financial vs. Woorim Machinery Co | DB Financial vs. ENERGYMACHINERY KOREA CoLtd | DB Financial vs. Dongwoo Farm To | DB Financial vs. Dongkuk Structures Construction |
| SK Hynix vs. Atinum Investment Co | SK Hynix vs. Sangsangin Investment Securities | SK Hynix vs. Samyung Trading Co | SK Hynix vs. DB Financial 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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