Correlation Between Ssangyong Information and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Dongwon System 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 Dongwon System 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 Dongwon System, you can compare the effects of market volatilities on Ssangyong Information and Dongwon System 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 Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Dongwon System.
Diversification Opportunities for Ssangyong Information and Dongwon System
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Dongwon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System 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 Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Dongwon System go up and down completely randomly.
Pair Corralation between Ssangyong Information and Dongwon System
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Dongwon System. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.74 times less risky than Dongwon System. The stock trades about -0.01 of its potential returns per unit of risk. The Dongwon System is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,822,635 in Dongwon System on September 20, 2024 and sell it today you would earn a total of 432,365 from holding Dongwon System or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Dongwon System
Performance |
| Timeline |
| Ssangyong Information |
| Dongwon System |
Ssangyong Information and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Dongwon System
The main advantage of trading using opposite Ssangyong Information and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| Ssangyong Information vs. Narae Nanotech Corp | Ssangyong Information vs. System and Application | Ssangyong Information vs. DataSolution | Ssangyong Information vs. Lotte Data Communication |
| Dongwon System vs. Nable Communications | Dongwon System vs. Shinsegae Information Communication | Dongwon System vs. Ssangyong Information Communication | Dongwon System vs. Koryo Credit Information |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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