Correlation Between Ssangyong Information and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Korea Electronic 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 Korea Electronic 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 Korea Electronic Certification, you can compare the effects of market volatilities on Ssangyong Information and Korea Electronic 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 Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Korea Electronic.
Diversification Opportunities for Ssangyong Information and Korea Electronic
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Korea is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Korea Electronic go up and down completely randomly.
Pair Corralation between Ssangyong Information and Korea Electronic
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.71 times more return on investment than Korea Electronic. However, Ssangyong Information Communication is 1.42 times less risky than Korea Electronic. It trades about -0.03 of its potential returns per unit of risk. Korea Electronic Certification is currently generating about -0.03 per unit of risk. If you would invest 87,200 in Ssangyong Information Communication on September 2, 2024 and sell it today you would lose (25,200) from holding Ssangyong Information Communication or give up 28.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Korea Electronic Certification
Performance |
| Timeline |
| Ssangyong Information |
| Korea Electronic Cer |
Ssangyong Information and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Korea Electronic
The main advantage of trading using opposite Ssangyong Information and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Korea Electronic 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 Korea Electronic will offset losses from the drop in Korea Electronic'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 |
| Korea Electronic vs. Korea New Network | Korea Electronic vs. ICD Co | Korea Electronic vs. DYPNF CoLtd | Korea Electronic vs. Busan Industrial Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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