Correlation Between Hwaseung Industries and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Hwaseung Industries 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 Hwaseung Industries and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwaseung Industries Co and Ssangyong Information Communication, you can compare the effects of market volatilities on Hwaseung Industries 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 Hwaseung Industries with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwaseung Industries and Ssangyong Information.
Diversification Opportunities for Hwaseung Industries and Ssangyong Information
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hwaseung and Ssangyong is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hwaseung Industries Co and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Hwaseung Industries 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 Hwaseung Industries Co 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 Hwaseung Industries i.e., Hwaseung Industries and Ssangyong Information go up and down completely randomly.
Pair Corralation between Hwaseung Industries and Ssangyong Information
Assuming the 90 days trading horizon Hwaseung Industries Co is expected to generate 1.01 times more return on investment than Ssangyong Information. However, Hwaseung Industries is 1.01 times more volatile than Ssangyong Information Communication. It trades about 0.09 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.03 per unit of risk. If you would invest 426,000 in Hwaseung Industries Co on September 12, 2024 and sell it today you would earn a total of 16,000 from holding Hwaseung Industries Co or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hwaseung Industries Co vs. Ssangyong Information Communic
Performance |
| Timeline |
| Hwaseung Industries |
| Ssangyong Information |
Hwaseung Industries and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwaseung Industries and Ssangyong Information
The main advantage of trading using opposite Hwaseung Industries and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwaseung Industries 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.| Hwaseung Industries vs. Innowireless Co | Hwaseung Industries vs. Insung Information Co | Hwaseung Industries vs. Nice Information Telecommunication | Hwaseung Industries vs. BGF Retail Co |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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