Correlation Between Clean Science and Ssangyong Information

Can any of the company-specific risk be diversified away by investing in both Clean Science 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 Clean Science and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clean Science co and Ssangyong Information Communication, you can compare the effects of market volatilities on Clean Science 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 Clean Science with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and Ssangyong Information.

Diversification Opportunities for Clean Science and Ssangyong Information

-0.02

Correlation Coefficient

Clean Science  Ssangyong Information

Good diversification

The 3 months correlation between Clean and Ssangyong is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science co and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Clean Science 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 Clean Science co 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 Clean Science i.e., Clean Science and Ssangyong Information go up and down completely randomly.

Pair Corralation between Clean Science and Ssangyong Information

Assuming the 90 days trading horizon Clean Science co is expected to generate 2.73 times more return on investment than Ssangyong Information. However, Clean Science is 2.73 times more volatile than Ssangyong Information Communication. It trades about 0.22 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.02 per unit of risk. If you would invest  454,500  in Clean Science co on October 26, 2024 and sell it today you would earn a total of  60,500  from holding Clean Science co or generate 13.31% return on investment over 90 days.

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

Clean Science co  vs.  Ssangyong Information Communic

Clean Science co

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Science co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Clean Science is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ssangyong Information

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ssangyong Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Clean Science and Ssangyong Information

The main advantage of trading using opposite Clean Science and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Science 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.

The idea behind Clean Science co and Ssangyong Information Communication 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 Commodity Directory module to find actively traded commodities issued by global exchanges.