Correlation Between Daou Data and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Daou Data 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 Daou Data and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Data Corp and Ssangyong Information Communication, you can compare the effects of market volatilities on Daou Data 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 Daou Data with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Ssangyong Information.
Diversification Opportunities for Daou Data and Ssangyong Information
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daou and Ssangyong is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Daou Data 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 Daou Data Corp 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 Daou Data i.e., Daou Data and Ssangyong Information go up and down completely randomly.
Pair Corralation between Daou Data and Ssangyong Information
Assuming the 90 days trading horizon Daou Data Corp is expected to generate 1.49 times more return on investment than Ssangyong Information. However, Daou Data is 1.49 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 0.01 per unit of risk. If you would invest 1,073,000 in Daou Data Corp on September 2, 2024 and sell it today you would earn a total of 8,000 from holding Daou Data Corp or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Ssangyong Information Communic
Performance |
| Timeline |
| Daou Data Corp |
| Ssangyong Information |
Daou Data and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Ssangyong Information
The main advantage of trading using opposite Daou Data and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data 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.| Daou Data vs. Samsung Electronics Co | Daou Data vs. Samsung Electronics Co | Daou Data vs. KB Financial Group | Daou Data vs. Shinhan Financial Group |
| Ssangyong Information vs. DONGKUK TED METAL | Ssangyong Information vs. Korean Reinsurance Co | Ssangyong Information vs. Choil Aluminum | Ssangyong Information vs. Dongbang Transport Logistics |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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