Correlation Between DRB Industrial and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both DRB Industrial 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 DRB Industrial and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRB Industrial Co and Ssangyong Information Communication, you can compare the effects of market volatilities on DRB Industrial 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 DRB Industrial with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRB Industrial and Ssangyong Information.
Diversification Opportunities for DRB Industrial and Ssangyong Information
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DRB and Ssangyong is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding DRB Industrial 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 DRB Industrial 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 DRB Industrial 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 DRB Industrial i.e., DRB Industrial and Ssangyong Information go up and down completely randomly.
Pair Corralation between DRB Industrial and Ssangyong Information
Assuming the 90 days trading horizon DRB Industrial Co is expected to generate 2.0 times more return on investment than Ssangyong Information. However, DRB Industrial is 2.0 times more volatile than Ssangyong Information Communication. It trades about -0.06 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.25 per unit of risk. If you would invest 711,000 in DRB Industrial Co on November 5, 2024 and sell it today you would lose (17,000) from holding DRB Industrial Co or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRB Industrial Co vs. Ssangyong Information Communic
Performance |
| Timeline |
| DRB Industrial |
| Ssangyong Information |
DRB Industrial and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRB Industrial and Ssangyong Information
The main advantage of trading using opposite DRB Industrial and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRB Industrial 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.| DRB Industrial vs. Sejong Telecom | DRB Industrial vs. Youngsin Metal Industrial | DRB Industrial vs. Kukil Metal Co | DRB Industrial vs. Digital Power Communications |
| Ssangyong Information vs. LG Household Healthcare | Ssangyong Information vs. Miwon Chemicals Co | Ssangyong Information vs. Sung Bo Chemicals | Ssangyong Information vs. Infinitt Healthcare 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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