Correlation Between Finetechnix CoLtd and SK Hynix
Can any of the company-specific risk be diversified away by investing in both Finetechnix CoLtd 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 Finetechnix CoLtd and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finetechnix CoLtd and SK Hynix, you can compare the effects of market volatilities on Finetechnix CoLtd 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 Finetechnix CoLtd with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finetechnix CoLtd and SK Hynix.
Diversification Opportunities for Finetechnix CoLtd and SK Hynix
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finetechnix and 000660 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Finetechnix CoLtd 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 Finetechnix CoLtd 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 Finetechnix CoLtd i.e., Finetechnix CoLtd and SK Hynix go up and down completely randomly.
Pair Corralation between Finetechnix CoLtd and SK Hynix
Assuming the 90 days trading horizon Finetechnix CoLtd is expected to generate 3.42 times more return on investment than SK Hynix. However, Finetechnix CoLtd is 3.42 times more volatile than SK Hynix. It trades about 0.18 of its potential returns per unit of risk. SK Hynix is currently generating about 0.41 per unit of risk. If you would invest 114,900 in Finetechnix CoLtd on November 1, 2024 and sell it today you would earn a total of 37,800 from holding Finetechnix CoLtd or generate 32.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finetechnix CoLtd vs. SK Hynix
Performance |
| Timeline |
| Finetechnix CoLtd |
| SK Hynix |
Finetechnix CoLtd and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finetechnix CoLtd and SK Hynix
The main advantage of trading using opposite Finetechnix CoLtd and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finetechnix CoLtd 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.| Finetechnix CoLtd vs. Sempio Foods Co | Finetechnix CoLtd vs. Samlip General Foods | Finetechnix CoLtd vs. Hyundai Green Food | Finetechnix CoLtd vs. FOODWELL Co |
| SK Hynix vs. ADTechnology CoLtd | SK Hynix vs. FoodNamoo | SK Hynix vs. Orbitech Co | SK Hynix vs. Solution Advanced Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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