Correlation Between Ssangyong Information and Lake Materials
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Lake Materials 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 Lake Materials 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 Lake Materials Co, you can compare the effects of market volatilities on Ssangyong Information and Lake Materials 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 Lake Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Lake Materials.
Diversification Opportunities for Ssangyong Information and Lake Materials
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ssangyong and Lake is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Lake Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Materials 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 Lake Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Materials has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Lake Materials go up and down completely randomly.
Pair Corralation between Ssangyong Information and Lake Materials
Assuming the 90 days trading horizon Ssangyong Information is expected to generate 1.54 times less return on investment than Lake Materials. In addition to that, Ssangyong Information is 1.01 times more volatile than Lake Materials Co. It trades about 0.25 of its total potential returns per unit of risk. Lake Materials Co is currently generating about 0.39 per unit of volatility. If you would invest 1,156,000 in Lake Materials Co on December 1, 2024 and sell it today you would earn a total of 719,000 from holding Lake Materials Co or generate 62.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Lake Materials Co
Performance |
| Timeline |
| Ssangyong Information |
| Lake Materials |
Ssangyong Information and Lake Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Lake Materials
The main advantage of trading using opposite Ssangyong Information and Lake Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Lake Materials 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 Lake Materials will offset losses from the drop in Lake Materials' long position.| Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. PJ Metal Co | Ssangyong Information vs. Formetal Co | Ssangyong Information vs. Eagon Industrial Co |
| Lake Materials vs. Samsung Electronics Co | Lake Materials vs. Samsung Electronics Co | Lake Materials vs. LG Energy Solution | Lake Materials vs. SK Hynix |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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