Correlation Between Hyunwoo Industrial and SK Hynix
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial 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 Hyunwoo Industrial and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyunwoo Industrial Co and SK Hynix, you can compare the effects of market volatilities on Hyunwoo Industrial 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 Hyunwoo Industrial with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and SK Hynix.
Diversification Opportunities for Hyunwoo Industrial and SK Hynix
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyunwoo and 000660 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Hyunwoo Industrial 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 Hyunwoo Industrial 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 Hyunwoo Industrial i.e., Hyunwoo Industrial and SK Hynix go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and SK Hynix
Assuming the 90 days trading horizon Hyunwoo Industrial is expected to generate 4.1 times less return on investment than SK Hynix. But when comparing it to its historical volatility, Hyunwoo Industrial Co is 2.31 times less risky than SK Hynix. It trades about 0.08 of its potential returns per unit of risk. SK Hynix is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 18,190,000 in SK Hynix on November 4, 2024 and sell it today you would earn a total of 1,730,000 from holding SK Hynix or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. SK Hynix
Performance |
| Timeline |
| Hyunwoo Industrial |
| SK Hynix |
Hyunwoo Industrial and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and SK Hynix
The main advantage of trading using opposite Hyunwoo Industrial and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial 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.| Hyunwoo Industrial vs. Seoul Electronics Telecom | Hyunwoo Industrial vs. Hankuk Steel Wire | Hyunwoo Industrial vs. Seah Steel Corp | Hyunwoo Industrial vs. Finebesteel |
| SK Hynix vs. Youngsin Metal Industrial | SK Hynix vs. Lion Chemtech Co | SK Hynix vs. Kukil Metal Co | SK Hynix vs. Duksan Hi Metal |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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