Correlation Between SK Hynix and Kubota
Can any of the company-specific risk be diversified away by investing in both SK Hynix and Kubota 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 SK Hynix and Kubota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK hynix and Kubota, you can compare the effects of market volatilities on SK Hynix and Kubota 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 SK Hynix with a short position of Kubota. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and Kubota.
Diversification Opportunities for SK Hynix and Kubota
Very good diversification
The 3 months correlation between HY9H and Kubota is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SK hynix and Kubota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubota and SK Hynix 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 SK hynix are associated (or correlated) with Kubota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubota has no effect on the direction of SK Hynix i.e., SK Hynix and Kubota go up and down completely randomly.
Pair Corralation between SK Hynix and Kubota
Assuming the 90 days trading horizon SK hynix is expected to generate 2.24 times more return on investment than Kubota. However, SK Hynix is 2.24 times more volatile than Kubota. It trades about 0.04 of its potential returns per unit of risk. Kubota is currently generating about -0.01 per unit of risk. If you would invest 8,540 in SK hynix on September 3, 2024 and sell it today you would earn a total of 2,360 from holding SK hynix or generate 27.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK hynix vs. Kubota
Performance |
| Timeline |
| SK hynix |
| Kubota |
SK Hynix and Kubota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and Kubota
The main advantage of trading using opposite SK Hynix and Kubota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, Kubota 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 Kubota will offset losses from the drop in Kubota's long position.| SK Hynix vs. NVIDIA | SK Hynix vs. Taiwan Semiconductor Manufacturing | SK Hynix vs. Advanced Micro Devices | SK Hynix vs. Intel |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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