Correlation Between Kyung Chang and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Kyung Chang 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 Kyung Chang and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and Ssangyong Information Communication, you can compare the effects of market volatilities on Kyung Chang 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 Kyung Chang with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Ssangyong Information.
Diversification Opportunities for Kyung Chang and Ssangyong Information
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kyung and Ssangyong is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Kyung Chang 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 Kyung Chang Industrial 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 Kyung Chang i.e., Kyung Chang and Ssangyong Information go up and down completely randomly.
Pair Corralation between Kyung Chang and Ssangyong Information
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.96 times more return on investment than Ssangyong Information. However, Kyung Chang is 1.96 times more volatile than Ssangyong Information Communication. It trades about 0.02 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.02 per unit of risk. If you would invest 195,424 in Kyung Chang Industrial on October 11, 2024 and sell it today you would earn a total of 7,076 from holding Kyung Chang Industrial or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Ssangyong Information Communic
Performance |
| Timeline |
| Kyung Chang Industrial |
| Ssangyong Information |
Kyung Chang and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Ssangyong Information
The main advantage of trading using opposite Kyung Chang and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang 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.| Kyung Chang vs. Daewon Chemical Co | Kyung Chang vs. Youngbo Chemical Co | Kyung Chang vs. KPX Green Chemical | Kyung Chang vs. Namhae Chemical |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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