Correlation Between Daishin Information and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Daishin Information 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 Daishin Information and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and Ssangyong Information Communication, you can compare the effects of market volatilities on Daishin Information 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 Daishin Information with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Ssangyong Information.
Diversification Opportunities for Daishin Information and Ssangyong Information
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Ssangyong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Daishin 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 Daishin Information Communications 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 Daishin Information i.e., Daishin Information and Ssangyong Information go up and down completely randomly.
Pair Corralation between Daishin Information and Ssangyong Information
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 2.72 times more return on investment than Ssangyong Information. However, Daishin Information is 2.72 times more volatile than Ssangyong Information Communication. It trades about -0.07 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.19 per unit of risk. If you would invest 106,800 in Daishin Information Communications on November 3, 2024 and sell it today you would lose (3,800) from holding Daishin Information Communications or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Ssangyong Information Communic
Performance |
| Timeline |
| Daishin Information |
| Ssangyong Information |
Daishin Information and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Ssangyong Information
The main advantage of trading using opposite Daishin Information and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information 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.| Daishin Information vs. SK Telecom Co | Daishin Information vs. Fine Besteel Co | Daishin Information vs. Histeel | Daishin Information vs. Korea Information Communications |
| Ssangyong Information vs. ITM Semiconductor Co | Ssangyong Information vs. LG Chemicals | Ssangyong Information vs. LG Household Healthcare | Ssangyong Information vs. E Investment Development |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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