Correlation Between Iljin Materials and SSR
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and SSR 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 Iljin Materials and SSR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Materials Co and SSR Inc, you can compare the effects of market volatilities on Iljin Materials and SSR 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 Iljin Materials with a short position of SSR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and SSR.
Diversification Opportunities for Iljin Materials and SSR
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iljin and SSR is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and SSR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Inc and Iljin Materials 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 Iljin Materials Co are associated (or correlated) with SSR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Inc has no effect on the direction of Iljin Materials i.e., Iljin Materials and SSR go up and down completely randomly.
Pair Corralation between Iljin Materials and SSR
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the SSR. In addition to that, Iljin Materials is 2.7 times more volatile than SSR Inc. It trades about -0.7 of its total potential returns per unit of risk. SSR Inc is currently generating about 0.13 per unit of volatility. If you would invest 327,000 in SSR Inc on September 1, 2024 and sell it today you would earn a total of 10,000 from holding SSR Inc or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Iljin Materials Co vs. SSR Inc
Performance |
| Timeline |
| Iljin Materials |
| SSR Inc |
Iljin Materials and SSR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and SSR
The main advantage of trading using opposite Iljin Materials and SSR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, SSR 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 SSR will offset losses from the drop in SSR's long position.| Iljin Materials vs. Samsung Electronics Co | Iljin Materials vs. Samsung Electronics Co | Iljin Materials vs. LG Energy Solution | Iljin 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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