Correlation Between Ssangyong Information and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Daehan Steel 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 Daehan Steel 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 Daehan Steel, you can compare the effects of market volatilities on Ssangyong Information and Daehan Steel 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 Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Daehan Steel.
Diversification Opportunities for Ssangyong Information and Daehan Steel
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ssangyong and Daehan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel 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 Daehan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Steel has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Daehan Steel go up and down completely randomly.
Pair Corralation between Ssangyong Information and Daehan Steel
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.85 times more return on investment than Daehan Steel. However, Ssangyong Information Communication is 1.18 times less risky than Daehan Steel. It trades about 0.04 of its potential returns per unit of risk. Daehan Steel is currently generating about 0.0 per unit of risk. If you would invest 63,600 in Ssangyong Information Communication on October 25, 2024 and sell it today you would earn a total of 400.00 from holding Ssangyong Information Communication or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Daehan Steel
Performance |
| Timeline |
| Ssangyong Information |
| Daehan Steel |
Ssangyong Information and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Daehan Steel
The main advantage of trading using opposite Ssangyong Information and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Daehan Steel 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 Daehan Steel will offset losses from the drop in Daehan Steel's long position.| Ssangyong Information vs. Hyundai Home Shopping | Ssangyong Information vs. GS Engineering Construction | Ssangyong Information vs. Hankook Furniture Co | Ssangyong Information vs. Seoam Machinery Industry |
| Daehan Steel vs. Wireless Power Amplifier | Daehan Steel vs. Ssangyong Information Communication | Daehan Steel vs. Shinil Industrial Co | Daehan Steel vs. Korea Air Svc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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