Correlation Between Ssangyong Information and RFTech
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and RFTech 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 RFTech 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 RFTech Co, you can compare the effects of market volatilities on Ssangyong Information and RFTech 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 RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and RFTech.
Diversification Opportunities for Ssangyong Information and RFTech
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ssangyong and RFTech is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech 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 RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and RFTech go up and down completely randomly.
Pair Corralation between Ssangyong Information and RFTech
Assuming the 90 days trading horizon Ssangyong Information is expected to generate 5.13 times less return on investment than RFTech. But when comparing it to its historical volatility, Ssangyong Information Communication is 1.63 times less risky than RFTech. It trades about 0.1 of its potential returns per unit of risk. RFTech Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 301,500 in RFTech Co on September 1, 2024 and sell it today you would earn a total of 41,500 from holding RFTech Co or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. RFTech Co
Performance |
| Timeline |
| Ssangyong Information |
| RFTech |
Ssangyong Information and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and RFTech
The main advantage of trading using opposite Ssangyong Information and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, RFTech 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 RFTech will offset losses from the drop in RFTech's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind | Ssangyong Information vs. Mirae Asset Daewoo |
| RFTech vs. Kukil Metal Co | RFTech vs. Osang Healthcare Co,Ltd | RFTech vs. CKH Food Health | RFTech vs. Infinitt Healthcare 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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