Correlation Between Ssangyong Information and MSC
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and MSC 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 MSC 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 MSC Co, you can compare the effects of market volatilities on Ssangyong Information and MSC 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 MSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and MSC.
Diversification Opportunities for Ssangyong Information and MSC
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ssangyong and MSC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and MSC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSC Co 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 MSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSC Co has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and MSC go up and down completely randomly.
Pair Corralation between Ssangyong Information and MSC
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the MSC. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.7 times less risky than MSC. The stock trades about -0.03 of its potential returns per unit of risk. The MSC Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 562,123 in MSC Co on September 3, 2024 and sell it today you would lose (4,123) from holding MSC Co or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. MSC Co
Performance |
| Timeline |
| Ssangyong Information |
| MSC Co |
Ssangyong Information and MSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and MSC
The main advantage of trading using opposite Ssangyong Information and MSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, MSC 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 MSC will offset losses from the drop in MSC's long position.| Ssangyong Information vs. SBI Investment KOREA | Ssangyong Information vs. Jeju Beer Co | Ssangyong Information vs. Coloray International Investment | Ssangyong Information vs. NH 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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