Correlation Between DSC Investment and Ssangyong Information

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Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Ssangyong Information Communication, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Ssangyong Information.

Diversification Opportunities for DSC Investment and Ssangyong Information

DSCSsangyongDiversified AwayDSCSsangyongDiversified Away100%
0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between DSC and Ssangyong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and DSC Investment 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 DSC Investment 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 DSC Investment i.e., DSC Investment and Ssangyong Information go up and down completely randomly.

Pair Corralation between DSC Investment and Ssangyong Information

Assuming the 90 days trading horizon DSC Investment is expected to generate 1.33 times more return on investment than Ssangyong Information. However, DSC Investment is 1.33 times more volatile than Ssangyong Information Communication. It trades about 0.05 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.06 per unit of risk. If you would invest  284,000  in DSC Investment on September 20, 2024 and sell it today you would earn a total of  14,500  from holding DSC Investment or generate 5.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.39%
ValuesDaily Returns

DSC Investment  vs.  Ssangyong Information Communic

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15241520 010280
       Timeline  
DSC Investment 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in DSC Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DSC Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2,6002,7002,8002,9003,0003,1003,2003,300
Ssangyong Information 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 4 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec580590600610620630640650660

DSC Investment and Ssangyong Information Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.41-4.8-3.19-1.580.01.643.34.976.63 0.050.100.15
JavaScript chart by amCharts 3.21.15241520 010280
       Returns  

Pair Trading with DSC Investment and Ssangyong Information

The main advantage of trading using opposite DSC Investment and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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 DSC Investment 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.
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 Anywhere module to track or share privately all of your investments from the convenience of any device.

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