Correlation Between Ssangyong Information and Youngchang Chemical
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Youngchang Chemical 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 Youngchang Chemical 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 Youngchang Chemical Co, you can compare the effects of market volatilities on Ssangyong Information and Youngchang Chemical 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 Youngchang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Youngchang Chemical.
Diversification Opportunities for Ssangyong Information and Youngchang Chemical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ssangyong and Youngchang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Youngchang Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngchang Chemical 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 Youngchang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngchang Chemical has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Youngchang Chemical go up and down completely randomly.
Pair Corralation between Ssangyong Information and Youngchang Chemical
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Youngchang Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 6.43 times less risky than Youngchang Chemical. The stock trades about -0.22 of its potential returns per unit of risk. The Youngchang Chemical Co is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 1,357,000 in Youngchang Chemical Co on November 1, 2024 and sell it today you would earn a total of 798,000 from holding Youngchang Chemical Co or generate 58.81% 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. Youngchang Chemical Co
Performance |
| Timeline |
| Ssangyong Information |
| Youngchang Chemical |
Ssangyong Information and Youngchang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Youngchang Chemical
The main advantage of trading using opposite Ssangyong Information and Youngchang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Youngchang Chemical 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 Youngchang Chemical will offset losses from the drop in Youngchang Chemical's long position.| Ssangyong Information vs. Grand Korea Leisure | Ssangyong Information vs. Dongwoon Anatech Co | Ssangyong Information vs. Playgram Co | Ssangyong Information vs. KMH Hitech Co |
| Youngchang Chemical vs. Bosung Power Technology | Youngchang Chemical vs. Ssangyong Information Communication | Youngchang Chemical vs. Korea Air Svc | Youngchang Chemical vs. HB Technology TD |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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