Correlation Between Ssangyong Materials and Samyoung Electronics
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Samyoung Electronics 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 Materials and Samyoung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Materials Corp and Samyoung Electronics Co, you can compare the effects of market volatilities on Ssangyong Materials and Samyoung Electronics 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 Materials with a short position of Samyoung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Samyoung Electronics.
Diversification Opportunities for Ssangyong Materials and Samyoung Electronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ssangyong and Samyoung is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Samyoung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyoung Electronics and Ssangyong 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 Ssangyong Materials Corp are associated (or correlated) with Samyoung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyoung Electronics has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Samyoung Electronics go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Samyoung Electronics
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 2.86 times more return on investment than Samyoung Electronics. However, Ssangyong Materials is 2.86 times more volatile than Samyoung Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Samyoung Electronics Co is currently generating about -0.21 per unit of risk. If you would invest 218,500 in Ssangyong Materials Corp on September 13, 2024 and sell it today you would earn a total of 11,000 from holding Ssangyong Materials Corp or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Samyoung Electronics Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Samyoung Electronics |
Ssangyong Materials and Samyoung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Samyoung Electronics
The main advantage of trading using opposite Ssangyong Materials and Samyoung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Samyoung Electronics 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 Samyoung Electronics will offset losses from the drop in Samyoung Electronics' long position.| Ssangyong Materials vs. Samsung Electronics Co | Ssangyong Materials vs. Samsung Electronics Co | Ssangyong Materials vs. SK Hynix | Ssangyong Materials vs. POSCO Holdings |
| Samyoung Electronics vs. Ssangyong Information Communication | Samyoung Electronics vs. TOPMATERIAL LTD | Samyoung Electronics vs. Kisan Telecom Co | Samyoung Electronics vs. Ssangyong Materials Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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