Correlation Between Air Busan and SK Hynix
Can any of the company-specific risk be diversified away by investing in both Air Busan 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 Air Busan and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Busan Co and SK Hynix, you can compare the effects of market volatilities on Air Busan 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 Air Busan with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and SK Hynix.
Diversification Opportunities for Air Busan and SK Hynix
Modest diversification
The 3 months correlation between Air and 000660 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Air Busan 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 Air Busan 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 Air Busan i.e., Air Busan and SK Hynix go up and down completely randomly.
Pair Corralation between Air Busan and SK Hynix
Assuming the 90 days trading horizon Air Busan Co is expected to under-perform the SK Hynix. But the stock apears to be less risky and, when comparing its historical volatility, Air Busan Co is 1.08 times less risky than SK Hynix. The stock trades about -0.15 of its potential returns per unit of risk. The SK Hynix is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 17,700,000 in SK Hynix on September 26, 2024 and sell it today you would lose (850,000) from holding SK Hynix or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. SK Hynix
Performance |
| Timeline |
| Air Busan |
| SK Hynix |
Air Busan and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and SK Hynix
The main advantage of trading using opposite Air Busan and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan 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.The idea behind Air Busan Co and SK Hynix pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SK Hynix vs. Dongsin Engineering Construction | SK Hynix vs. Doosan Fuel Cell | SK Hynix vs. Daishin Balance 1 | SK Hynix vs. Total Soft Bank |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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