Correlation Between Namyang Dairy and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy and Ssangyong Information 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 Namyang Dairy and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and Ssangyong Information Communication, you can compare the effects of market volatilities on Namyang Dairy and Ssangyong Information 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 Namyang Dairy with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and Ssangyong Information.
Diversification Opportunities for Namyang Dairy and Ssangyong Information
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Namyang and Ssangyong is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Namyang Dairy 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 Namyang Dairy are associated (or correlated) with Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Namyang Dairy i.e., Namyang Dairy and Ssangyong Information go up and down completely randomly.
Pair Corralation between Namyang Dairy and Ssangyong Information
Assuming the 90 days trading horizon Namyang Dairy is expected to generate 49.11 times more return on investment than Ssangyong Information. However, Namyang Dairy is 49.11 times more volatile than Ssangyong Information Communication. It trades about 0.08 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.08 per unit of risk. If you would invest 4,512,220 in Namyang Dairy on September 12, 2024 and sell it today you would earn a total of 1,807,780 from holding Namyang Dairy or generate 40.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Namyang Dairy vs. Ssangyong Information Communic
Performance |
| Timeline |
| Namyang Dairy |
| Ssangyong Information |
Namyang Dairy and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and Ssangyong Information
The main advantage of trading using opposite Namyang Dairy and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| Namyang Dairy vs. Korea New Network | Namyang Dairy vs. ICD Co | Namyang Dairy vs. DYPNF CoLtd | Namyang Dairy vs. Solution Advanced Technology |
| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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