Correlation Between Ssangyong Information and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and SK Chemicals 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 SK Chemicals 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 SK Chemicals Co, you can compare the effects of market volatilities on Ssangyong Information and SK Chemicals 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 SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and SK Chemicals.
Diversification Opportunities for Ssangyong Information and SK Chemicals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and 28513K is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals 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 SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and SK Chemicals go up and down completely randomly.
Pair Corralation between Ssangyong Information and SK Chemicals
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.86 times more return on investment than SK Chemicals. However, Ssangyong Information Communication is 1.16 times less risky than SK Chemicals. It trades about 0.13 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.46 per unit of risk. If you would invest 60,000 in Ssangyong Information Communication on September 2, 2024 and sell it today you would earn a total of 2,000 from holding Ssangyong Information Communication or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. SK Chemicals Co
Performance |
| Timeline |
| Ssangyong Information |
| SK Chemicals |
Ssangyong Information and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and SK Chemicals
The main advantage of trading using opposite Ssangyong Information and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' long position.| Ssangyong Information vs. DONGKUK TED METAL | Ssangyong Information vs. Korean Reinsurance Co | Ssangyong Information vs. Choil Aluminum | Ssangyong Information vs. Dongbang Transport Logistics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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