Correlation Between SS TECH and SK Hynix
Can any of the company-specific risk be diversified away by investing in both SS TECH 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 SS TECH and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and SK Hynix, you can compare the effects of market volatilities on SS TECH 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 SS TECH with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and SK Hynix.
Diversification Opportunities for SS TECH and SK Hynix
Good diversification
The 3 months correlation between 101490 and 000660 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and SS TECH 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 SS TECH 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 SS TECH i.e., SS TECH and SK Hynix go up and down completely randomly.
Pair Corralation between SS TECH and SK Hynix
Assuming the 90 days trading horizon SS TECH is expected to under-perform the SK Hynix. But the stock apears to be less risky and, when comparing its historical volatility, SS TECH is 1.11 times less risky than SK Hynix. The stock trades about -0.13 of its potential returns per unit of risk. The SK Hynix is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 20,091,100 in SK Hynix on August 25, 2024 and sell it today you would lose (2,421,100) from holding SK Hynix or give up 12.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. SK Hynix
Performance |
| Timeline |
| SS TECH |
| SK Hynix |
SS TECH and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and SK Hynix
The main advantage of trading using opposite SS TECH and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH 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.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| SK Hynix vs. Korea Real Estate | SK Hynix vs. Korea Ratings Co | SK Hynix vs. IQuest Co | SK Hynix vs. Wonbang Tech 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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