Correlation Between Moonbae Steel and SK Hynix

Can any of the company-specific risk be diversified away by investing in both Moonbae Steel 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 Moonbae Steel and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moonbae Steel and SK Hynix, you can compare the effects of market volatilities on Moonbae Steel 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 Moonbae Steel with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and SK Hynix.

Diversification Opportunities for Moonbae Steel and SK Hynix

0.0

Correlation Coefficient

Moonbae Steel  SK Hynix

Pay attention - limited upside

The 3 months correlation between Moonbae and 000660 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Moonbae Steel 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 Moonbae Steel 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 Moonbae Steel i.e., Moonbae Steel and SK Hynix go up and down completely randomly.

Pair Corralation between Moonbae Steel and SK Hynix

If you would invest  16,960,000  in SK Hynix on October 23, 2024 and sell it today you would earn a total of  4,240,000  from holding SK Hynix or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Moonbae Steel  vs.  SK Hynix

Moonbae Steel

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Moonbae Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Moonbae Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SK Hynix

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SK Hynix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SK Hynix may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Moonbae Steel and SK Hynix

The main advantage of trading using opposite Moonbae Steel and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel 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 Moonbae Steel 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.