Correlation Between Ssangyong Information and Innowireless
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Innowireless 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 Innowireless 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 Innowireless Co, you can compare the effects of market volatilities on Ssangyong Information and Innowireless 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 Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Innowireless.
Diversification Opportunities for Ssangyong Information and Innowireless
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ssangyong and Innowireless is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless 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 Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Innowireless go up and down completely randomly.
Pair Corralation between Ssangyong Information and Innowireless
Assuming the 90 days trading horizon Ssangyong Information is expected to generate 2.73 times less return on investment than Innowireless. But when comparing it to its historical volatility, Ssangyong Information Communication is 1.75 times less risky than Innowireless. It trades about 0.12 of its potential returns per unit of risk. Innowireless Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,729,000 in Innowireless Co on September 3, 2024 and sell it today you would earn a total of 135,000 from holding Innowireless Co or generate 7.81% 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. Innowireless Co
Performance |
| Timeline |
| Ssangyong Information |
| Innowireless |
Ssangyong Information and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Innowireless
The main advantage of trading using opposite Ssangyong Information and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Ssangyong Information vs. SBI Investment KOREA | Ssangyong Information vs. Jeju Beer Co | Ssangyong Information vs. Coloray International Investment | Ssangyong Information vs. NH Investment Securities |
| Innowireless vs. Korea Computer | Innowireless vs. Lotte Data Communication | Innowireless vs. Samsung Publishing Co | Innowireless vs. Neungyule Education |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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