Correlation Between Aurora World and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Aurora World 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 Aurora World and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora World and Ssangyong Information Communication, you can compare the effects of market volatilities on Aurora World 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 Aurora World with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora World and Ssangyong Information.
Diversification Opportunities for Aurora World and Ssangyong Information
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurora and Ssangyong is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aurora World and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Aurora World 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 Aurora World 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 Aurora World i.e., Aurora World and Ssangyong Information go up and down completely randomly.
Pair Corralation between Aurora World and Ssangyong Information
Assuming the 90 days trading horizon Aurora World is expected to generate 0.87 times more return on investment than Ssangyong Information. However, Aurora World is 1.15 times less risky than Ssangyong Information. It trades about -0.03 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.06 per unit of risk. If you would invest 729,547 in Aurora World on September 12, 2024 and sell it today you would lose (124,547) from holding Aurora World or give up 17.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Aurora World vs. Ssangyong Information Communic
Performance |
| Timeline |
| Aurora World |
| Ssangyong Information |
Aurora World and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora World and Ssangyong Information
The main advantage of trading using opposite Aurora World and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora World 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.| Aurora World vs. Ssangyong Information Communication | Aurora World vs. PJ Metal Co | Aurora World vs. CG Hi Tech | Aurora World vs. Korea Computer |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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