Correlation Between Seoul Semiconductor and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor 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 Seoul Semiconductor and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Semiconductor Co and Ssangyong Information Communication, you can compare the effects of market volatilities on Seoul Semiconductor 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 Seoul Semiconductor with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and Ssangyong Information.
Diversification Opportunities for Seoul Semiconductor and Ssangyong Information
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoul and Ssangyong is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor 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 Seoul Semiconductor 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 Seoul Semiconductor 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 Seoul Semiconductor i.e., Seoul Semiconductor and Ssangyong Information go up and down completely randomly.
Pair Corralation between Seoul Semiconductor and Ssangyong Information
Assuming the 90 days trading horizon Seoul Semiconductor Co is expected to under-perform the Ssangyong Information. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Semiconductor Co is 8.36 times less risky than Ssangyong Information. The stock trades about -0.44 of its potential returns per unit of risk. The Ssangyong Information Communication is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 63,600 in Ssangyong Information Communication on December 10, 2024 and sell it today you would earn a total of 16,000 from holding Ssangyong Information Communication or generate 25.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Seoul Semiconductor Co vs. Ssangyong Information Communic
Performance |
Timeline |
Seoul Semiconductor |
Ssangyong Information |
Seoul Semiconductor and Ssangyong Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seoul Semiconductor and Ssangyong Information
The main advantage of trading using opposite Seoul Semiconductor and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Semiconductor 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 Seoul Semiconductor 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.Ssangyong Information vs. Jeong Moon Information | Ssangyong Information vs. Nice Information Telecommunication | Ssangyong Information vs. Lotte Data Communication | Ssangyong Information vs. Tway Air 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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