Correlation Between Ssangyong Information and TOPMATERIAL
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and TOPMATERIAL 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 TOPMATERIAL 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 TOPMATERIAL LTD, you can compare the effects of market volatilities on Ssangyong Information and TOPMATERIAL 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 TOPMATERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and TOPMATERIAL.
Diversification Opportunities for Ssangyong Information and TOPMATERIAL
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ssangyong and TOPMATERIAL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and TOPMATERIAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPMATERIAL LTD 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 TOPMATERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPMATERIAL LTD has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and TOPMATERIAL go up and down completely randomly.
Pair Corralation between Ssangyong Information and TOPMATERIAL
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the TOPMATERIAL. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 2.51 times less risky than TOPMATERIAL. The stock trades about -0.03 of its potential returns per unit of risk. The TOPMATERIAL LTD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,370,000 in TOPMATERIAL LTD on September 12, 2024 and sell it today you would lose (755,000) from holding TOPMATERIAL LTD or give up 22.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. TOPMATERIAL LTD
Performance |
| Timeline |
| Ssangyong Information |
| TOPMATERIAL LTD |
Ssangyong Information and TOPMATERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and TOPMATERIAL
The main advantage of trading using opposite Ssangyong Information and TOPMATERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, TOPMATERIAL 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 TOPMATERIAL will offset losses from the drop in TOPMATERIAL's long position.| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Solution Advanced Technology | Ssangyong Information vs. Busan Industrial Co |
| TOPMATERIAL vs. Foodnamoo | TOPMATERIAL vs. Sam Yang Foods | TOPMATERIAL vs. Shinsegae Food | TOPMATERIAL vs. Ssangyong Information Communication |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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