Correlation Between SK Hynix and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both SK Hynix and AstraZeneca PLC 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 AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK hynix and AstraZeneca PLC, you can compare the effects of market volatilities on SK Hynix and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and AstraZeneca PLC.
Diversification Opportunities for SK Hynix and AstraZeneca PLC
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HY9H and AstraZeneca is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SK hynix and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of SK Hynix i.e., SK Hynix and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between SK Hynix and AstraZeneca PLC
Assuming the 90 days trading horizon SK hynix is expected to under-perform the AstraZeneca PLC. In addition to that, SK Hynix is 1.36 times more volatile than AstraZeneca PLC. It trades about -0.17 of its total potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.03 per unit of volatility. If you would invest 6,500 in AstraZeneca PLC on September 1, 2024 and sell it today you would lose (150.00) from holding AstraZeneca PLC or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK hynix vs. AstraZeneca PLC
Performance |
| Timeline |
| SK hynix |
| AstraZeneca PLC |
SK Hynix and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and AstraZeneca PLC
The main advantage of trading using opposite SK Hynix and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.The idea behind SK hynix and AstraZeneca PLC 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.| AstraZeneca PLC vs. AbbVie Inc | AstraZeneca PLC vs. Pfizer Inc | AstraZeneca PLC vs. Superior Plus Corp | AstraZeneca PLC vs. NMI Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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