Correlation Between Ssangyong Information and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on Ssangyong Information and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and GS Engineering.
Diversification Opportunities for Ssangyong Information and GS Engineering
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ssangyong and 006360 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and GS Engineering go up and down completely randomly.
Pair Corralation between Ssangyong Information and GS Engineering
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 1.04 times more return on investment than GS Engineering. However, Ssangyong Information is 1.04 times more volatile than GS Engineering Construction. It trades about 0.3 of its potential returns per unit of risk. GS Engineering Construction is currently generating about -0.01 per unit of risk. If you would invest 59,000 in Ssangyong Information Communication on October 11, 2024 and sell it today you would earn a total of 5,600 from holding Ssangyong Information Communication or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. GS Engineering Construction
Performance |
| Timeline |
| Ssangyong Information |
| GS Engineering Const |
Ssangyong Information and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and GS Engineering
The main advantage of trading using opposite Ssangyong Information and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Ssangyong Information vs. CKH Food Health | Ssangyong Information vs. Korean Drug Co | Ssangyong Information vs. Green Cross Medical | Ssangyong Information vs. Kyung Chang Industrial |
| GS Engineering vs. Daishin Information Communications | GS Engineering vs. Duksan Hi Metal | GS Engineering vs. Seoyon Topmetal Co | GS Engineering vs. Display Tech 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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