Correlation Between Ssangyong Information and Hyundai Green

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

Diversification Opportunities for Ssangyong Information and Hyundai Green

0.68

Correlation Coefficient

Ssangyong Information  Hyundai Green

Poor diversification

The 3 months correlation between Ssangyong and Hyundai is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food 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 Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Hyundai Green go up and down completely randomly.

Pair Corralation between Ssangyong Information and Hyundai Green

Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.52 times more return on investment than Hyundai Green. However, Ssangyong Information Communication is 1.94 times less risky than Hyundai Green. It trades about 0.01 of its potential returns per unit of risk. Hyundai Green Food is currently generating about -0.33 per unit of risk. If you would invest  64,300  in Ssangyong Information Communication on October 23, 2024 and sell it today you would earn a total of  100.00  from holding Ssangyong Information Communication or generate 0.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ssangyong Information Communic  vs.  Hyundai Green Food

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.

Hyundai Green Food

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Green Food are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai Green sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ssangyong Information and Hyundai Green

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

The idea behind Ssangyong Information Communication and Hyundai Green Food 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.