Correlation Between Seah Steel and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Seah 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 Seah 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 Seah Steel Corp and Ssangyong Information Communication, you can compare the effects of market volatilities on Seah 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 Seah Steel with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Ssangyong Information.
Diversification Opportunities for Seah Steel and Ssangyong Information
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seah and Ssangyong is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Seah 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 Seah Steel Corp 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 Seah Steel i.e., Seah Steel and Ssangyong Information go up and down completely randomly.
Pair Corralation between Seah Steel and Ssangyong Information
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 1.11 times more return on investment than Ssangyong Information. However, Seah Steel is 1.11 times more volatile than Ssangyong Information Communication. It trades about 0.01 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.04 per unit of risk. If you would invest 14,160,000 in Seah Steel Corp on November 6, 2024 and sell it today you would earn a total of 310,000 from holding Seah Steel Corp or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Ssangyong Information Communic
Performance |
| Timeline |
| Seah Steel Corp |
| Ssangyong Information |
Seah Steel and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Ssangyong Information
The main advantage of trading using opposite Seah Steel and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah 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.| Seah Steel vs. Woori Technology Investment | Seah Steel vs. SBI Investment KOREA | Seah Steel vs. Sangsangin Investment Securities | Seah Steel vs. EBEST Investment Securities |
| Ssangyong Information vs. Korean Air Lines | Ssangyong Information vs. Jahwa Electronics Co | Ssangyong Information vs. PJ Electronics Co | Ssangyong Information vs. Daewoo Electronic Components |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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