Correlation Between Heungkuk Metaltech and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech 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 Heungkuk Metaltech and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Ssangyong Information Communication, you can compare the effects of market volatilities on Heungkuk Metaltech 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 Heungkuk Metaltech with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Ssangyong Information.
Diversification Opportunities for Heungkuk Metaltech and Ssangyong Information
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Heungkuk and Ssangyong is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech i.e., Heungkuk Metaltech and Ssangyong Information go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Ssangyong Information
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to under-perform the Ssangyong Information. In addition to that, Heungkuk Metaltech is 1.12 times more volatile than Ssangyong Information Communication. It trades about -0.05 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.1 per unit of volatility. If you would invest 60,500 in Ssangyong Information Communication on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Ssangyong Information Communication or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Ssangyong Information Communic
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Ssangyong Information |
Heungkuk Metaltech and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Ssangyong Information
The main advantage of trading using opposite Heungkuk Metaltech and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech 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.| Heungkuk Metaltech vs. Hyunwoo Industrial Co | Heungkuk Metaltech vs. Namhwa Industrial Co | Heungkuk Metaltech vs. Daiyang Metal Co | Heungkuk Metaltech vs. Handok Clean Tech |
| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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