Correlation Between Ssangyong Information and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on Ssangyong Information and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Finebesteel.
Diversification Opportunities for Ssangyong Information and Finebesteel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ssangyong and Finebesteel is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Finebesteel go up and down completely randomly.
Pair Corralation between Ssangyong Information and Finebesteel
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Finebesteel. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.8 times less risky than Finebesteel. The stock trades about -0.08 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 100,900 in Finebesteel on November 3, 2024 and sell it today you would earn a total of 5,600 from holding Finebesteel or generate 5.55% 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. Finebesteel
Performance |
| Timeline |
| Ssangyong Information |
| Finebesteel |
Ssangyong Information and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Finebesteel
The main advantage of trading using opposite Ssangyong Information and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| Ssangyong Information vs. ITM Semiconductor Co | Ssangyong Information vs. LG Chemicals | Ssangyong Information vs. LG Household Healthcare | Ssangyong Information vs. E Investment Development |
| Finebesteel vs. ADTechnology CoLtd | Finebesteel vs. Bosung Power Technology | Finebesteel vs. Eugene Technology CoLtd | Finebesteel vs. Daesung Hi 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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