Correlation Between Ssangyong Materials and J Steel
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and J Steel 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 J Steel 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 J Steel Co, you can compare the effects of market volatilities on Ssangyong Materials and J Steel 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 J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and J Steel.
Diversification Opportunities for Ssangyong Materials and J Steel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ssangyong and 023440 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel 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 J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and J Steel go up and down completely randomly.
Pair Corralation between Ssangyong Materials and J Steel
Assuming the 90 days trading horizon Ssangyong Materials is expected to generate 3.84 times less return on investment than J Steel. But when comparing it to its historical volatility, Ssangyong Materials Corp is 1.65 times less risky than J Steel. It trades about 0.04 of its potential returns per unit of risk. J Steel Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 |
Ssangyong Materials Corp vs. J Steel Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| J Steel |
Ssangyong Materials and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and J Steel
The main advantage of trading using opposite Ssangyong Materials and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, J Steel 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 J Steel will offset losses from the drop in J Steel's long position.| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
| J Steel vs. Samsung Electronics Co | J Steel vs. Samsung Electronics Co | J Steel vs. LG Energy Solution | J Steel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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