Correlation Between Jeju Bank and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Jeju Bank 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 Jeju Bank and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Ssangyong Information Communication, you can compare the effects of market volatilities on Jeju Bank 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 Jeju Bank with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Ssangyong Information.
Diversification Opportunities for Jeju Bank and Ssangyong Information
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jeju and Ssangyong is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Jeju Bank 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 Jeju Bank 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 Jeju Bank i.e., Jeju Bank and Ssangyong Information go up and down completely randomly.
Pair Corralation between Jeju Bank and Ssangyong Information
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the Ssangyong Information. In addition to that, Jeju Bank is 1.45 times more volatile than Ssangyong Information Communication. It trades about -0.13 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.01 per unit of volatility. If you would invest 59,900 in Ssangyong Information Communication on September 12, 2024 and sell it today you would lose (900.00) from holding Ssangyong Information Communication or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Ssangyong Information Communic
Performance |
| Timeline |
| Jeju Bank |
| Ssangyong Information |
Jeju Bank and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Ssangyong Information
The main advantage of trading using opposite Jeju Bank and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank 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.| Jeju Bank vs. Wireless Power Amplifier | Jeju Bank vs. ABOV Semiconductor Co | Jeju Bank vs. Sejong Telecom | Jeju Bank vs. Nable Communications |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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