Correlation Between Daehan Steel and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Daehan Steel 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 Daehan Steel and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Ssangyong Information Communication, you can compare the effects of market volatilities on Daehan Steel 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 Daehan Steel with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Ssangyong Information.
Diversification Opportunities for Daehan Steel and Ssangyong Information
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daehan and Ssangyong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Daehan Steel 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 Daehan Steel 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 Daehan Steel i.e., Daehan Steel and Ssangyong Information go up and down completely randomly.
Pair Corralation between Daehan Steel and Ssangyong Information
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.91 times more return on investment than Ssangyong Information. However, Daehan Steel is 1.09 times less risky than Ssangyong Information. It trades about 0.07 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.13 per unit of risk. If you would invest 1,641,000 in Daehan Steel on November 5, 2024 and sell it today you would earn a total of 16,000 from holding Daehan Steel or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Ssangyong Information Communic
Performance |
| Timeline |
| Daehan Steel |
| Ssangyong Information |
Daehan Steel and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Ssangyong Information
The main advantage of trading using opposite Daehan Steel and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel 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.| Daehan Steel vs. Aprogen Healthcare Games | Daehan Steel vs. Netmarble Games Corp | Daehan Steel vs. Kg Chemical | Daehan Steel vs. KPX Green Chemical |
| Ssangyong Information vs. Korea Air Svc | Ssangyong Information vs. NH Investment Securities | Ssangyong Information vs. SV Investment | Ssangyong Information vs. ABCO Electronics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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