Correlation Between Ssangyong Information and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Hanjin Transportation 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 Hanjin Transportation 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 Hanjin Transportation Co, you can compare the effects of market volatilities on Ssangyong Information and Hanjin Transportation 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 Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Hanjin Transportation.
Diversification Opportunities for Ssangyong Information and Hanjin Transportation
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and Hanjin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation 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 Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Ssangyong Information and Hanjin Transportation
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Hanjin Transportation. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.2 times less risky than Hanjin Transportation. The stock trades about -0.08 of its potential returns per unit of risk. The Hanjin Transportation Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,423,133 in Hanjin Transportation Co on September 4, 2024 and sell it today you would lose (528,133) from holding Hanjin Transportation Co or give up 21.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Hanjin Transportation Co
Performance |
| Timeline |
| Ssangyong Information |
| Hanjin Transportation |
Ssangyong Information and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Hanjin Transportation
The main advantage of trading using opposite Ssangyong Information and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Ssangyong Information vs. InfoBank | Ssangyong Information vs. Sam Yang Foods | Ssangyong Information vs. Jeju Bank | Ssangyong Information vs. Hana Financial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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