Correlation Between Ssangyong Information and Dongkuk Steel
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Dongkuk Steel 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 Ssangyong Information and Dongkuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Information Communication and Dongkuk Steel Mill, you can compare the effects of market volatilities on Ssangyong Information and Dongkuk Steel 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 Ssangyong Information with a short position of Dongkuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Dongkuk Steel.
Diversification Opportunities for Ssangyong Information and Dongkuk Steel
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Dongkuk is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Dongkuk Steel Mill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Steel Mill and Ssangyong Information 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 Ssangyong Information Communication are associated (or correlated) with Dongkuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Steel Mill has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Dongkuk Steel go up and down completely randomly.
Pair Corralation between Ssangyong Information and Dongkuk Steel
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Dongkuk Steel. In addition to that, Ssangyong Information is 1.57 times more volatile than Dongkuk Steel Mill. It trades about -0.05 of its total potential returns per unit of risk. Dongkuk Steel Mill is currently generating about -0.07 per unit of volatility. If you would invest 833,140 in Dongkuk Steel Mill on September 13, 2024 and sell it today you would lose (87,140) from holding Dongkuk Steel Mill or give up 10.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Dongkuk Steel Mill
Performance |
| Timeline |
| Ssangyong Information |
| Dongkuk Steel Mill |
Ssangyong Information and Dongkuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Dongkuk Steel
The main advantage of trading using opposite Ssangyong Information and Dongkuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Dongkuk Steel 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 Dongkuk Steel will offset losses from the drop in Dongkuk Steel's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co |
| Dongkuk Steel vs. LG Chemicals | Dongkuk Steel vs. POSCO Holdings | Dongkuk Steel vs. Hanwha Solutions | Dongkuk Steel vs. Lotte Chemical Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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