Correlation Between Korea Information and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Korea 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 Korea 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 Korea Information Engineering and Ssangyong Information Communication, you can compare the effects of market volatilities on Korea 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 Korea Information with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Ssangyong Information.
Diversification Opportunities for Korea Information and Ssangyong Information
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Ssangyong is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Korea 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 Korea Information Engineering 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 Korea Information i.e., Korea Information and Ssangyong Information go up and down completely randomly.
Pair Corralation between Korea Information and Ssangyong Information
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Ssangyong Information. In addition to that, Korea Information is 1.33 times more volatile than Ssangyong Information Communication. It trades about -0.41 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.1 per unit of volatility. If you would invest 60,500 in Ssangyong Information Communication on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Ssangyong Information Communication or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Ssangyong Information Communic
Performance |
| Timeline |
| Korea Information |
| Ssangyong Information |
Korea Information and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Ssangyong Information
The main advantage of trading using opposite Korea Information and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea 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.| Korea Information vs. NICE Information Service | Korea Information vs. Korea Shipbuilding Offshore | Korea Information vs. National Plastic Co | Korea Information vs. Moadata Co |
| Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind | Ssangyong Information vs. Mirae Asset Daewoo | Ssangyong Information vs. Finebesteel |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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