Correlation Between SEOJEON ELECTRIC and SK Hynix
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC 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 SEOJEON ELECTRIC and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOJEON ELECTRIC MACHINERY and SK Hynix, you can compare the effects of market volatilities on SEOJEON ELECTRIC 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 SEOJEON ELECTRIC with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and SK Hynix.
Diversification Opportunities for SEOJEON ELECTRIC and SK Hynix
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SEOJEON and 000660 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY 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 SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and SK Hynix go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and SK Hynix
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 1.33 times more return on investment than SK Hynix. However, SEOJEON ELECTRIC is 1.33 times more volatile than SK Hynix. It trades about 0.22 of its potential returns per unit of risk. SK Hynix is currently generating about -0.05 per unit of risk. If you would invest 402,000 in SEOJEON ELECTRIC MACHINERY on November 7, 2024 and sell it today you would earn a total of 72,500 from holding SEOJEON ELECTRIC MACHINERY or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. SK Hynix
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SK Hynix |
SEOJEON ELECTRIC and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and SK Hynix
The main advantage of trading using opposite SEOJEON ELECTRIC and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC 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.| SEOJEON ELECTRIC vs. Koh Young Technology | SEOJEON ELECTRIC vs. Hana Financial | SEOJEON ELECTRIC vs. Samsung Securities |
| SK Hynix vs. Dongbang Transport Logistics | SK Hynix vs. Choil Aluminum | SK Hynix vs. Ewon Comfortech Co | SK Hynix vs. Dongnam Chemical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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