Correlation Between Ssangyong Information and People Technology
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and People Technology 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 People Technology 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 People Technology, you can compare the effects of market volatilities on Ssangyong Information and People Technology 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and People Technology.
Diversification Opportunities for Ssangyong Information and People Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssangyong and People is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and People Technology go up and down completely randomly.
Pair Corralation between Ssangyong Information and People Technology
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the People Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.9 times less risky than People Technology. The stock trades about -0.01 of its potential returns per unit of risk. The People Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,201,469 in People Technology on September 24, 2024 and sell it today you would lose (271,469) from holding People Technology or give up 6.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ssangyong Information Communic vs. People Technology
Performance |
Timeline |
Ssangyong Information |
People Technology |
Ssangyong Information and People Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ssangyong Information and People Technology
The main advantage of trading using opposite Ssangyong Information and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.Ssangyong Information vs. Hansol Homedeco Co | Ssangyong Information vs. Air Busan Co | Ssangyong Information vs. Nable Communications | Ssangyong Information vs. ECSTELECOM Co |
People Technology vs. Ssangyong Information Communication | People Technology vs. Insung Information Co | People Technology vs. SCI Information Service | People Technology vs. Daou Data Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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