Correlation Between Korea Steel and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Korea Steel 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 Korea Steel and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Steel Co and Ssangyong Information Communication, you can compare the effects of market volatilities on Korea Steel 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 Korea Steel with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Steel and Ssangyong Information.
Diversification Opportunities for Korea Steel and Ssangyong Information
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Ssangyong is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Korea Steel 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 Korea 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 Korea Steel 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 Korea Steel i.e., Korea Steel and Ssangyong Information go up and down completely randomly.
Pair Corralation between Korea Steel and Ssangyong Information
Assuming the 90 days trading horizon Korea Steel Co is expected to generate 1.43 times more return on investment than Ssangyong Information. However, Korea Steel is 1.43 times more volatile than Ssangyong Information Communication. It trades about 0.06 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.04 per unit of risk. If you would invest 153,300 in Korea Steel Co on October 26, 2024 and sell it today you would earn a total of 11,400 from holding Korea Steel Co or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Steel Co vs. Ssangyong Information Communic
Performance |
| Timeline |
| Korea Steel |
| Ssangyong Information |
Korea Steel and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Steel and Ssangyong Information
The main advantage of trading using opposite Korea Steel and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Steel 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.| Korea Steel vs. Automobile Pc | Korea Steel vs. Lotte Non Life Insurance | Korea Steel vs. Samsung Life Insurance | Korea Steel vs. Nice Information Telecommunication |
| Ssangyong Information vs. Inzi Display CoLtd | Ssangyong Information vs. PlayD Co | Ssangyong Information vs. Aprogen Healthcare Games | Ssangyong Information vs. Hanmi Semiconductor 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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