Correlation Between Dongkuk Structures and SK Hynix
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures 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 Dongkuk Structures and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongkuk Structures Construction and SK Hynix, you can compare the effects of market volatilities on Dongkuk Structures 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 Dongkuk Structures with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and SK Hynix.
Diversification Opportunities for Dongkuk Structures and SK Hynix
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongkuk and 000660 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Dongkuk Structures 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 Dongkuk Structures Construction 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 Dongkuk Structures i.e., Dongkuk Structures and SK Hynix go up and down completely randomly.
Pair Corralation between Dongkuk Structures and SK Hynix
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to under-perform the SK Hynix. But the stock apears to be less risky and, when comparing its historical volatility, Dongkuk Structures Construction is 1.09 times less risky than SK Hynix. The stock trades about -0.05 of its potential returns per unit of risk. The SK Hynix is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,072,908 in SK Hynix on September 3, 2024 and sell it today you would earn a total of 7,917,092 from holding SK Hynix or generate 98.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. SK Hynix
Performance |
| Timeline |
| Dongkuk Structures |
| SK Hynix |
Dongkuk Structures and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and SK Hynix
The main advantage of trading using opposite Dongkuk Structures and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures 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.| Dongkuk Structures vs. LG Display | Dongkuk Structures vs. Hyundai Motor | Dongkuk Structures vs. Hyundai Motor Co | Dongkuk Structures vs. Hyundai Motor Co |
| SK Hynix vs. Haitai Confectionery Foods | SK Hynix vs. Dongkuk Structures Construction | SK Hynix vs. Tuksu Engineering ConstructionLtd | SK Hynix vs. Camus Engineering Construction |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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