Correlation Between Ssangyong Information and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Lotte Chemical 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 Lotte Chemical 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 Lotte Chemical Corp, you can compare the effects of market volatilities on Ssangyong Information and Lotte Chemical 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 Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Lotte Chemical.
Diversification Opportunities for Ssangyong Information and Lotte Chemical
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssangyong and Lotte is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Lotte Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Corp 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 Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Corp has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Lotte Chemical go up and down completely randomly.
Pair Corralation between Ssangyong Information and Lotte Chemical
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 0.53 times more return on investment than Lotte Chemical. However, Ssangyong Information Communication is 1.9 times less risky than Lotte Chemical. It trades about -0.06 of its potential returns per unit of risk. Lotte Chemical Corp is currently generating about -0.09 per unit of risk. If you would invest 83,300 in Ssangyong Information Communication on September 14, 2024 and sell it today you would lose (20,200) from holding Ssangyong Information Communication or give up 24.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Lotte Chemical Corp
Performance |
| Timeline |
| Ssangyong Information |
| Lotte Chemical Corp |
Ssangyong Information and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Lotte Chemical
The main advantage of trading using opposite Ssangyong Information and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Lotte Chemical 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 Lotte Chemical will offset losses from the drop in Lotte Chemical's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind |
| Lotte Chemical vs. Ssangyong Information Communication | Lotte Chemical vs. Nable Communications | Lotte Chemical vs. Shinsegae Information Communication | Lotte Chemical vs. MetaLabs 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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