Correlation Between SK Holdings and SK Hynix
Can any of the company-specific risk be diversified away by investing in both SK Holdings 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 SK Holdings and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Holdings Co and SK Hynix, you can compare the effects of market volatilities on SK Holdings 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 SK Holdings with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and SK Hynix.
Diversification Opportunities for SK Holdings and SK Hynix
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 034730 and 000660 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and SK Holdings 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 Holdings Co 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 SK Holdings i.e., SK Holdings and SK Hynix go up and down completely randomly.
Pair Corralation between SK Holdings and SK Hynix
Assuming the 90 days trading horizon SK Holdings Co is expected to generate 0.38 times more return on investment than SK Hynix. However, SK Holdings Co is 2.66 times less risky than SK Hynix. It trades about 0.21 of its potential returns per unit of risk. SK Hynix is currently generating about 0.01 per unit of risk. If you would invest 14,090,000 in SK Holdings Co on November 7, 2024 and sell it today you would earn a total of 720,000 from holding SK Holdings Co or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
SK Holdings Co vs. SK Hynix
Performance |
| Timeline |
| SK Holdings |
| SK Hynix |
SK Holdings and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Holdings and SK Hynix
The main advantage of trading using opposite SK Holdings and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Holdings 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.| SK Holdings vs. Samsung Card Co | SK Holdings vs. EBEST Investment Securities | SK Holdings vs. Koh Young Technology | SK Holdings vs. Hansol Chemica |
| SK Hynix vs. Dongbang Transport Logistics | SK Hynix vs. Choil Aluminum | SK Hynix vs. Ewon Comfortech Co | SK Hynix vs. Dongnam Chemical 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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