Correlation Between Jin Air and Ssangyong Information

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

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

Diversification Opportunities for Jin Air and Ssangyong Information

0.14

Correlation Coefficient

Jin Air  Ssangyong Information

Average diversification

The 3 months correlation between Jin and Ssangyong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air 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 Jin Air 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 Jin Air 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 Jin Air i.e., Jin Air and Ssangyong Information go up and down completely randomly.

Pair Corralation between Jin Air and Ssangyong Information

Assuming the 90 days trading horizon Jin Air is expected to generate 2.73 times less return on investment than Ssangyong Information. In addition to that, Jin Air is 1.96 times more volatile than Ssangyong Information Communication. It trades about 0.01 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.06 per unit of volatility. If you would invest  61,800  in Ssangyong Information Communication on September 20, 2024 and sell it today you would earn a total of  3,200  from holding Ssangyong Information Communication or generate 5.18% return on investment over 90 days.

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

Jin Air Co  vs.  Ssangyong Information Communic

Jin Air

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jin Air Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jin Air 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

4 of 100

Modest

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.

Pair Trading with Jin Air and Ssangyong Information

The main advantage of trading using opposite Jin Air and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air 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 Jin Air 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 Channel module to use Commodity Channel Index to analyze current equity momentum.