Correlation Between Ssangyong Information and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Seoul Food 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 Seoul Food 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 Seoul Food Industrial, you can compare the effects of market volatilities on Ssangyong Information and Seoul Food 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 Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Seoul Food.
Diversification Opportunities for Ssangyong Information and Seoul Food
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ssangyong and Seoul is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial 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 Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Seoul Food go up and down completely randomly.
Pair Corralation between Ssangyong Information and Seoul Food
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.71 times more return on investment than Seoul Food. However, Ssangyong Information Communication is 1.42 times less risky than Seoul Food. It trades about 0.1 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.13 per unit of risk. 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 |
Ssangyong Information Communic vs. Seoul Food Industrial
Performance |
| Timeline |
| Ssangyong Information |
| Seoul Food Industrial |
Ssangyong Information and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Seoul Food
The main advantage of trading using opposite Ssangyong Information and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind | Ssangyong Information vs. Mirae Asset Daewoo |
| Seoul Food vs. SBI Investment KOREA | Seoul Food vs. E Investment Development | Seoul Food vs. SV Investment | Seoul Food vs. Daol Investment Securities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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