Correlation Between Spolytech and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Spolytech 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 Spolytech and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spolytech Co and Ssangyong Information Communication, you can compare the effects of market volatilities on Spolytech 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 Spolytech with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spolytech and Ssangyong Information.
Diversification Opportunities for Spolytech and Ssangyong Information
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spolytech and Ssangyong is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Spolytech Co and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Spolytech 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 Spolytech Co 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 Spolytech i.e., Spolytech and Ssangyong Information go up and down completely randomly.
Pair Corralation between Spolytech and Ssangyong Information
Assuming the 90 days trading horizon Spolytech Co is expected to generate 2.81 times more return on investment than Ssangyong Information. However, Spolytech is 2.81 times more volatile than Ssangyong Information Communication. It trades about 0.32 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.19 per unit of risk. If you would invest 132,300 in Spolytech Co on November 3, 2024 and sell it today you would earn a total of 21,100 from holding Spolytech Co or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spolytech Co vs. Ssangyong Information Communic
Performance |
| Timeline |
| Spolytech |
| Ssangyong Information |
Spolytech and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spolytech and Ssangyong Information
The main advantage of trading using opposite Spolytech and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spolytech 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.| Spolytech vs. Inzi Display CoLtd | Spolytech vs. Sangsin Energy Display | Spolytech vs. Daishin Information Communications | Spolytech vs. Seoul Food 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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