Correlation Between Ssangyong Information and Daewoo Engineering
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Daewoo Engineering 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 Daewoo Engineering 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 Daewoo Engineering Construction, you can compare the effects of market volatilities on Ssangyong Information and Daewoo Engineering 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 Daewoo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Daewoo Engineering.
Diversification Opportunities for Ssangyong Information and Daewoo Engineering
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Daewoo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Daewoo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Engineering 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 Daewoo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Engineering has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Daewoo Engineering go up and down completely randomly.
Pair Corralation between Ssangyong Information and Daewoo Engineering
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.85 times more return on investment than Daewoo Engineering. However, Ssangyong Information Communication is 1.18 times less risky than Daewoo Engineering. It trades about 0.11 of its potential returns per unit of risk. Daewoo Engineering Construction is currently generating about -0.13 per unit of risk. If you would invest 62,500 in Ssangyong Information Communication on September 19, 2024 and sell it today you would earn a total of 3,000 from holding Ssangyong Information Communication or generate 4.8% 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. Daewoo Engineering Constructio
Performance |
| Timeline |
| Ssangyong Information |
| Daewoo Engineering |
Ssangyong Information and Daewoo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Daewoo Engineering
The main advantage of trading using opposite Ssangyong Information and Daewoo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Daewoo Engineering 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 Daewoo Engineering will offset losses from the drop in Daewoo Engineering's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind |
| Daewoo Engineering vs. Sangsin Energy Display | Daewoo Engineering vs. Ssangyong Information Communication | Daewoo Engineering vs. Lotte Non Life Insurance | Daewoo Engineering vs. Korean Reinsurance 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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