Correlation Between Ssangyong Information and Dongwon System

Specify exactly 2 symbols:
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

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ssangyong and Dongwon is -0.31. 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 generate 2.38 times more return on investment than Dongwon System. However, Ssangyong Information is 2.38 times more volatile than Dongwon System. It trades about 0.12 of its potential returns per unit of risk. Dongwon System is currently generating about -0.1 per unit of risk. If you would invest  64,500  in Ssangyong Information Communication on December 11, 2024 and sell it today you would earn a total of  15,100  from holding Ssangyong Information Communication or generate 23.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ssangyong Information Communic  vs.  Dongwon System

 Performance 
       Timeline  
Ssangyong Information 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ssangyong Information sustained solid returns over the last few months and may actually be approaching a breakup point.
Dongwon System 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Dongwon System has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.
The idea behind Ssangyong Information Communication and Dongwon System pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Global Correlations
Find global opportunities by holding instruments from different markets