Correlation Between Ssangyong Information and Company K
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Company K 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 Company K 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 Company K Partners, you can compare the effects of market volatilities on Ssangyong Information and Company K 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 Company K. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Company K.
Diversification Opportunities for Ssangyong Information and Company K
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and Company is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Company K Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Company K Partners 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 Company K. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Company K Partners has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Company K go up and down completely randomly.
Pair Corralation between Ssangyong Information and Company K
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Company K. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 2.93 times less risky than Company K. The stock trades about -0.06 of its potential returns per unit of risk. The Company K Partners is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 562,000 in Company K Partners on September 12, 2024 and sell it today you would lose (91,000) from holding Company K Partners or give up 16.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Company K Partners
Performance |
| Timeline |
| Ssangyong Information |
| Company K Partners |
Ssangyong Information and Company K Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Company K
The main advantage of trading using opposite Ssangyong Information and Company K positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Company K 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 Company K will offset losses from the drop in Company K's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co |
| Company K vs. Shinsegae Information Communication | Company K vs. Ssangyong Information Communication | Company K vs. Moadata Co | Company K vs. DataSolution |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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