Correlation Between Ssangyong Information and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Hyosung Heavy 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 Hyosung Heavy 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 Hyosung Heavy Industries, you can compare the effects of market volatilities on Ssangyong Information and Hyosung Heavy 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 Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Hyosung Heavy.
Diversification Opportunities for Ssangyong Information and Hyosung Heavy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Hyosung is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries 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 Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Hyosung Heavy go up and down completely randomly.
Pair Corralation between Ssangyong Information and Hyosung Heavy
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Hyosung Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 2.35 times less risky than Hyosung Heavy. The stock trades about -0.02 of its potential returns per unit of risk. The Hyosung Heavy Industries is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,828,217 in Hyosung Heavy Industries on September 13, 2024 and sell it today you would earn a total of 35,871,783 from holding Hyosung Heavy Industries or generate 458.24% 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. Hyosung Heavy Industries
Performance |
| Timeline |
| Ssangyong Information |
| Hyosung Heavy Industries |
Ssangyong Information and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Hyosung Heavy
The main advantage of trading using opposite Ssangyong Information and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Hyosung Heavy 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 Hyosung Heavy will offset losses from the drop in Hyosung Heavy's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind |
| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. Korea Refract |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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