Correlation Between Jin Air and SK Hynix
Can any of the company-specific risk be diversified away by investing in both Jin Air 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 Jin Air and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and SK Hynix, you can compare the effects of market volatilities on Jin Air 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 Jin Air with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and SK Hynix.
Diversification Opportunities for Jin Air and SK Hynix
Modest diversification
The 3 months correlation between Jin and 000660 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Jin Air 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 Jin Air 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 Jin Air i.e., Jin Air and SK Hynix go up and down completely randomly.
Pair Corralation between Jin Air and SK Hynix
Assuming the 90 days trading horizon Jin Air Co is expected to generate 1.12 times more return on investment than SK Hynix. However, Jin Air is 1.12 times more volatile than SK Hynix. It trades about 0.04 of its potential returns per unit of risk. SK Hynix is currently generating about -0.22 per unit of risk. If you would invest 1,057,000 in Jin Air Co on August 24, 2024 and sell it today you would earn a total of 19,000 from holding Jin Air Co or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. SK Hynix
Performance |
| Timeline |
| Jin Air |
| SK Hynix |
Jin Air and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and SK Hynix
The main advantage of trading using opposite Jin Air and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air 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.| Jin Air vs. Korea Shipbuilding Offshore | Jin Air vs. Nable Communications | Jin Air vs. Lotte Data Communication | Jin Air vs. Woori Technology |
| SK Hynix vs. Kaonmedia Co | SK Hynix vs. Jin Air Co | SK Hynix vs. Daewon Media Co | SK Hynix vs. SM Entertainment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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