Correlation Between Ssangyong Information and STI
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and STI 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 STI 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 STI Co, you can compare the effects of market volatilities on Ssangyong Information and STI 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 STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and STI.
Diversification Opportunities for Ssangyong Information and STI
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssangyong and STI is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI 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 STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and STI go up and down completely randomly.
Pair Corralation between Ssangyong Information and STI
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.36 times more return on investment than STI. However, Ssangyong Information Communication is 2.75 times less risky than STI. It trades about 0.13 of its potential returns per unit of risk. STI Co is currently generating about -0.51 per unit of risk. If you would invest 60,000 in Ssangyong Information Communication on September 2, 2024 and sell it today you would earn a total of 2,000 from holding Ssangyong Information Communication or generate 3.33% 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. STI Co
Performance |
| Timeline |
| Ssangyong Information |
| STI Co |
Ssangyong Information and STI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and STI
The main advantage of trading using opposite Ssangyong Information and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, STI 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 STI will offset losses from the drop in STI's long position.| Ssangyong Information vs. DONGKUK TED METAL | Ssangyong Information vs. Korean Reinsurance Co | Ssangyong Information vs. Choil Aluminum | Ssangyong Information vs. Dongbang Transport Logistics |
| STI vs. Dongsin Engineering Construction | STI vs. Doosan Fuel Cell | STI vs. Daishin Balance 1 | STI vs. Total Soft Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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