Correlation Between Ssangyong Information and Dentium

Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Dentium 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 Dentium 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 Dentium, you can compare the effects of market volatilities on Ssangyong Information and Dentium 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 Dentium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Dentium.

Diversification Opportunities for Ssangyong Information and Dentium

-0.21

Correlation Coefficient

Ssangyong Information  Dentium

Very good diversification

The 3 months correlation between Ssangyong and Dentium is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Dentium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentium 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 Dentium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dentium has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Dentium go up and down completely randomly.

Pair Corralation between Ssangyong Information and Dentium

Assuming the 90 days trading horizon Ssangyong Information is expected to generate 1.44 times less return on investment than Dentium. But when comparing it to its historical volatility, Ssangyong Information Communication is 1.32 times less risky than Dentium. It trades about 0.3 of its potential returns per unit of risk. Dentium is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  6,020,000  in Dentium on October 11, 2024 and sell it today you would earn a total of  880,000  from holding Dentium or generate 14.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Ssangyong Information Communic  vs.  Dentium

Ssangyong Information

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ssangyong Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dentium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dentium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ssangyong Information and Dentium

The main advantage of trading using opposite Ssangyong Information and Dentium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Dentium 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 Dentium will offset losses from the drop in Dentium's long position.

The idea behind Ssangyong Information Communication and Dentium pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.