Correlation Between LX Semicon and SK Hynix
Can any of the company-specific risk be diversified away by investing in both LX Semicon 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 LX Semicon and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LX Semicon Co and SK Hynix, you can compare the effects of market volatilities on LX Semicon 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 LX Semicon with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of LX Semicon and SK Hynix.
Diversification Opportunities for LX Semicon and SK Hynix
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 108320 and 000660 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding LX Semicon Co and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and LX Semicon 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 LX Semicon 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 LX Semicon i.e., LX Semicon and SK Hynix go up and down completely randomly.
Pair Corralation between LX Semicon and SK Hynix
Assuming the 90 days trading horizon LX Semicon Co is expected to generate 0.76 times more return on investment than SK Hynix. However, LX Semicon Co is 1.32 times less risky than SK Hynix. It trades about 0.44 of its potential returns per unit of risk. SK Hynix is currently generating about 0.08 per unit of risk. If you would invest 5,660,000 in LX Semicon Co on November 27, 2024 and sell it today you would earn a total of 840,000 from holding LX Semicon Co or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LX Semicon Co vs. SK Hynix
Performance |
| Timeline |
| LX Semicon |
| SK Hynix |
LX Semicon and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LX Semicon and SK Hynix
The main advantage of trading using opposite LX Semicon and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LX Semicon 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.| LX Semicon vs. CKH Food Health | LX Semicon vs. LG Household Healthcare | LX Semicon vs. Sam Yang Foods | LX Semicon vs. Alton Sports CoLtd |
| SK Hynix vs. DC Media Co | SK Hynix vs. Vissem Electronics Co | SK Hynix vs. Sungho Electronics Corp | SK Hynix vs. MediaZen |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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