Correlation Between INNOX Advanced and SK Hynix
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced 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 INNOX Advanced and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and SK Hynix, you can compare the effects of market volatilities on INNOX Advanced 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 INNOX Advanced with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and SK Hynix.
Diversification Opportunities for INNOX Advanced and SK Hynix
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between INNOX and 000660 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and INNOX Advanced 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 INNOX Advanced Materials 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 INNOX Advanced i.e., INNOX Advanced and SK Hynix go up and down completely randomly.
Pair Corralation between INNOX Advanced and SK Hynix
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 0.77 times more return on investment than SK Hynix. However, INNOX Advanced Materials is 1.3 times less risky than SK Hynix. It trades about -0.03 of its potential returns per unit of risk. SK Hynix is currently generating about -0.15 per unit of risk. If you would invest 2,310,000 in INNOX Advanced Materials on August 25, 2024 and sell it today you would lose (55,000) from holding INNOX Advanced Materials or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. SK Hynix
Performance |
| Timeline |
| INNOX Advanced Materials |
| SK Hynix |
INNOX Advanced and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and SK Hynix
The main advantage of trading using opposite INNOX Advanced and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced 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.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. People Technology | INNOX Advanced vs. SIMMTECH Co | INNOX Advanced vs. Haesung DS 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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