Correlation Between J Steel and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both J Steel and Ssangyong 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 J Steel and Ssangyong Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Steel Co and Ssangyong Materials Corp, you can compare the effects of market volatilities on J Steel and Ssangyong 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 J Steel with a short position of Ssangyong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Ssangyong Materials.
Diversification Opportunities for J Steel and Ssangyong Materials
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 023440 and Ssangyong is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Ssangyong Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Materials Corp and J Steel 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 J Steel Co are associated (or correlated) with Ssangyong Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Materials Corp has no effect on the direction of J Steel i.e., J Steel and Ssangyong Materials go up and down completely randomly.
Pair Corralation between J Steel and Ssangyong Materials
Assuming the 90 days trading horizon J Steel Co is expected to generate 1.65 times more return on investment than Ssangyong Materials. However, J Steel is 1.65 times more volatile than Ssangyong Materials Corp. It trades about 0.08 of its potential returns per unit of risk. Ssangyong Materials Corp is currently generating about 0.04 per unit of risk. If you would invest 167,800 in J Steel Co on August 31, 2024 and sell it today you would earn a total of 12,100 from holding J Steel Co or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Steel Co vs. Ssangyong Materials Corp
Performance |
| Timeline |
| J Steel |
| Ssangyong Materials Corp |
J Steel and Ssangyong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Ssangyong Materials
The main advantage of trading using opposite J Steel and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Ssangyong 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 Ssangyong Materials will offset losses from the drop in Ssangyong Materials' long position.| J Steel vs. Samsung Electronics Co | J Steel vs. Samsung Electronics Co | J Steel vs. LG Energy Solution | J Steel vs. SK Hynix |
| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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