Correlation Between Ssangyong Information and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Hanshin Construction 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 Ssangyong Information and Hanshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Information Communication and Hanshin Construction Co, you can compare the effects of market volatilities on Ssangyong Information and Hanshin Construction 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 Ssangyong Information with a short position of Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Hanshin Construction.
Diversification Opportunities for Ssangyong Information and Hanshin Construction
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and Hanshin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction and Ssangyong Information 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 Ssangyong Information Communication are associated (or correlated) with Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Hanshin Construction go up and down completely randomly.
Pair Corralation between Ssangyong Information and Hanshin Construction
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.59 times more return on investment than Hanshin Construction. However, Ssangyong Information Communication is 1.7 times less risky than Hanshin Construction. It trades about 0.05 of its potential returns per unit of risk. Hanshin Construction Co is currently generating about -0.01 per unit of risk. If you would invest 61,500 in Ssangyong Information Communication on September 25, 2024 and sell it today you would earn a total of 2,800 from holding Ssangyong Information Communication or generate 4.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ssangyong Information Communic vs. Hanshin Construction Co
Performance |
Timeline |
Ssangyong Information |
Hanshin Construction |
Ssangyong Information and Hanshin Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ssangyong Information and Hanshin Construction
The main advantage of trading using opposite Ssangyong Information and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.Ssangyong Information vs. Settlebank | Ssangyong Information vs. Cafe24 Corp | Ssangyong Information vs. Korea Computer Systems | Ssangyong Information vs. SSR Inc |
Hanshin Construction vs. DB Insurance Co | Hanshin Construction vs. Sangsangin Investment Securities | Hanshin Construction vs. Korea Investment Holdings | Hanshin Construction vs. Korean Reinsurance 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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