Correlation Between Ssangyong Materials and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Tae Kyung 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 Tae Kyung 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 Tae Kyung Chemical, you can compare the effects of market volatilities on Ssangyong Materials and Tae Kyung 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 Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Tae Kyung.
Diversification Opportunities for Ssangyong Materials and Tae Kyung
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ssangyong and Tae is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical 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 Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Tae Kyung go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Tae Kyung
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 2.03 times more return on investment than Tae Kyung. However, Ssangyong Materials is 2.03 times more volatile than Tae Kyung Chemical. It trades about 0.02 of its potential returns per unit of risk. Tae Kyung Chemical is currently generating about 0.01 per unit of risk. If you would invest 244,390 in Ssangyong Materials Corp on October 11, 2024 and sell it today you would lose (2,890) from holding Ssangyong Materials Corp or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Tae Kyung Chemical
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Tae Kyung Chemical |
Ssangyong Materials and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Tae Kyung
The main advantage of trading using opposite Ssangyong Materials and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.| Ssangyong Materials vs. PJ Metal Co | Ssangyong Materials vs. Samyang Foods Co | Ssangyong Materials vs. Innowireless Co | Ssangyong Materials vs. Dongbang Transport Logistics |
| Tae Kyung vs. Dongil Metal Co | Tae Kyung vs. Eagon Industrial Co | Tae Kyung vs. INNOX Advanced Materials | Tae Kyung 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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