Correlation Between Korean Drug and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Korean Drug and Ssangyong Information 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 Korean Drug and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Drug Co and Ssangyong Information Communication, you can compare the effects of market volatilities on Korean Drug and Ssangyong Information 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 Korean Drug with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Ssangyong Information.
Diversification Opportunities for Korean Drug and Ssangyong Information
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korean and Ssangyong is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Korean Drug 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 Korean Drug Co are associated (or correlated) with Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Korean Drug i.e., Korean Drug and Ssangyong Information go up and down completely randomly.
Pair Corralation between Korean Drug and Ssangyong Information
Assuming the 90 days trading horizon Korean Drug Co is expected to generate 2.36 times more return on investment than Ssangyong Information. However, Korean Drug is 2.36 times more volatile than Ssangyong Information Communication. It trades about 0.24 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.3 per unit of risk. If you would invest 415,309 in Korean Drug Co on October 11, 2024 and sell it today you would earn a total of 75,691 from holding Korean Drug Co or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Drug Co vs. Ssangyong Information Communic
Performance |
| Timeline |
| Korean Drug |
| Ssangyong Information |
Korean Drug and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Ssangyong Information
The main advantage of trading using opposite Korean Drug and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| Korean Drug vs. Aprogen Healthcare Games | Korean Drug vs. iNtRON Biotechnology | Korean Drug vs. Mgame Corp | Korean Drug vs. Hwangkum Steel Technology |
| Ssangyong Information vs. CKH Food Health | Ssangyong Information vs. Korean Drug Co | Ssangyong Information vs. Green Cross Medical | Ssangyong Information vs. Kyung Chang Industrial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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