Correlation Between Hancom and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Hancom 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 Hancom and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancom Inc and Ssangyong Information Communication, you can compare the effects of market volatilities on Hancom 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 Hancom with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancom and Ssangyong Information.
Diversification Opportunities for Hancom and Ssangyong Information
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hancom and Ssangyong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hancom Inc and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Hancom 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 Hancom Inc 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 Hancom i.e., Hancom and Ssangyong Information go up and down completely randomly.
Pair Corralation between Hancom and Ssangyong Information
Assuming the 90 days trading horizon Hancom Inc is expected to generate 2.55 times more return on investment than Ssangyong Information. However, Hancom is 2.55 times more volatile than Ssangyong Information Communication. It trades about 0.14 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.04 per unit of risk. If you would invest 1,769,000 in Hancom Inc on September 13, 2024 and sell it today you would earn a total of 456,000 from holding Hancom Inc or generate 25.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancom Inc vs. Ssangyong Information Communic
Performance |
| Timeline |
| Hancom Inc |
| Ssangyong Information |
Hancom and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancom and Ssangyong Information
The main advantage of trading using opposite Hancom and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancom 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.| Hancom vs. Cube Entertainment | Hancom vs. Dreamus Company | Hancom vs. LG Energy Solution | Hancom vs. Dongwon System |
| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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