Correlation Between Ssangyong Information and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and KMH Hitech 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 KMH Hitech 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 KMH Hitech Co, you can compare the effects of market volatilities on Ssangyong Information and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and KMH Hitech.
Diversification Opportunities for Ssangyong Information and KMH Hitech
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and KMH is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and KMH Hitech go up and down completely randomly.
Pair Corralation between Ssangyong Information and KMH Hitech
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the KMH Hitech. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.24 times less risky than KMH Hitech. The stock trades about -0.03 of its potential returns per unit of risk. The KMH Hitech Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 133,800 in KMH Hitech Co on October 27, 2024 and sell it today you would lose (33,700) from holding KMH Hitech Co or give up 25.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. KMH Hitech Co
Performance |
| Timeline |
| Ssangyong Information |
| KMH Hitech |
Ssangyong Information and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and KMH Hitech
The main advantage of trading using opposite Ssangyong Information and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Ssangyong Information vs. DRB Industrial Co | Ssangyong Information vs. Lotte Data Communication | Ssangyong Information vs. Korea Information Communications | Ssangyong Information vs. Seoyon Topmetal Co |
| KMH Hitech vs. Kakao Games Corp | KMH Hitech vs. Daewoo Electronic Components | KMH Hitech vs. UJU Electronics Co | KMH Hitech vs. Display Tech 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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