Correlation Between SK Hynix and AhnLab
Can any of the company-specific risk be diversified away by investing in both SK Hynix and AhnLab 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 AhnLab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and AhnLab Inc, you can compare the effects of market volatilities on SK Hynix and AhnLab 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 AhnLab. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and AhnLab.
Diversification Opportunities for SK Hynix and AhnLab
Average diversification
The 3 months correlation between 000660 and AhnLab is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and AhnLab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AhnLab Inc 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 AhnLab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AhnLab Inc has no effect on the direction of SK Hynix i.e., SK Hynix and AhnLab go up and down completely randomly.
Pair Corralation between SK Hynix and AhnLab
Assuming the 90 days trading horizon SK Hynix is expected to generate 9.93 times less return on investment than AhnLab. But when comparing it to its historical volatility, SK Hynix is 1.36 times less risky than AhnLab. It trades about 0.02 of its potential returns per unit of risk. AhnLab Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,250,000 in AhnLab Inc on September 12, 2024 and sell it today you would earn a total of 2,370,000 from holding AhnLab Inc or generate 45.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SK Hynix vs. AhnLab Inc
Performance |
Timeline |
SK Hynix |
AhnLab Inc |
SK Hynix and AhnLab Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SK Hynix and AhnLab
The main advantage of trading using opposite SK Hynix and AhnLab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, AhnLab 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 AhnLab will offset losses from the drop in AhnLab's long position.SK Hynix vs. Cube Entertainment | SK Hynix vs. Dreamus Company | SK Hynix vs. LG Energy Solution | SK Hynix vs. Dongwon System |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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