Correlation Between SBI Investment and SK Hynix
Can any of the company-specific risk be diversified away by investing in both SBI Investment 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 SBI Investment and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and SK Hynix, you can compare the effects of market volatilities on SBI Investment 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 SBI Investment with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and SK Hynix.
Diversification Opportunities for SBI Investment and SK Hynix
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBI and 000660 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and SBI Investment 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 SBI Investment KOREA 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 SBI Investment i.e., SBI Investment and SK Hynix go up and down completely randomly.
Pair Corralation between SBI Investment and SK Hynix
Assuming the 90 days trading horizon SBI Investment is expected to generate 17.95 times less return on investment than SK Hynix. But when comparing it to its historical volatility, SBI Investment KOREA is 1.59 times less risky than SK Hynix. It trades about 0.04 of its potential returns per unit of risk. SK Hynix is currently generating about 0.46 of returns per unit of risk over similar time horizon. 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 |
SBI Investment KOREA vs. SK Hynix
Performance |
| Timeline |
| SBI Investment KOREA |
| SK Hynix |
SBI Investment and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and SK Hynix
The main advantage of trading using opposite SBI Investment and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment 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.| SBI Investment vs. Samsung Electronics Co | SBI Investment vs. Samsung Electronics Co | SBI Investment vs. SK Hynix | SBI Investment vs. HMM Co |
| SK Hynix vs. NICE Information Service | SK Hynix vs. Mgame Corp | SK Hynix vs. ITM Semiconductor Co | SK Hynix vs. Clean Science co |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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