Correlation Between Ssangyong Information and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Dongwon Metal 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 Metal 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 Metal Co, you can compare the effects of market volatilities on Ssangyong Information and Dongwon Metal 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 Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Dongwon Metal.
Diversification Opportunities for Ssangyong Information and Dongwon Metal
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Dongwon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal 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 Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Dongwon Metal go up and down completely randomly.
Pair Corralation between Ssangyong Information and Dongwon Metal
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.66 times more return on investment than Dongwon Metal. However, Ssangyong Information Communication is 1.52 times less risky than Dongwon Metal. It trades about 0.1 of its potential returns per unit of risk. Dongwon Metal Co is currently generating about -0.34 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Dongwon Metal Co
Performance |
| Timeline |
| Ssangyong Information |
| Dongwon Metal |
Ssangyong Information and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Dongwon Metal
The main advantage of trading using opposite Ssangyong Information and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Dongwon Metal 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 Metal will offset losses from the drop in Dongwon Metal's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind | Ssangyong Information vs. Mirae Asset Daewoo |
| Dongwon Metal vs. AptaBio Therapeutics | Dongwon Metal vs. Daewoo SBI SPAC | Dongwon Metal vs. Dream Security co | Dongwon Metal vs. Microfriend |
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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