Correlation Between Ssangyong Materials and Orbitech
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Orbitech 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 Orbitech 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 Orbitech Co, you can compare the effects of market volatilities on Ssangyong Materials and Orbitech 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 Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Orbitech.
Diversification Opportunities for Ssangyong Materials and Orbitech
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ssangyong and Orbitech is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech 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 Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Orbitech go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Orbitech
Assuming the 90 days trading horizon Ssangyong Materials is expected to generate 4.47 times less return on investment than Orbitech. But when comparing it to its historical volatility, Ssangyong Materials Corp is 1.63 times less risky than Orbitech. It trades about 0.12 of its potential returns per unit of risk. Orbitech Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 192,200 in Orbitech Co on October 29, 2024 and sell it today you would earn a total of 47,300 from holding Orbitech Co or generate 24.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Orbitech Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Orbitech |
Ssangyong Materials and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Orbitech
The main advantage of trading using opposite Ssangyong Materials and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| Ssangyong Materials vs. ABOV Semiconductor Co | Ssangyong Materials vs. Youngbo Chemical Co | Ssangyong Materials vs. Namhae Chemical | Ssangyong Materials vs. Korea Petro Chemical |
| Orbitech vs. Daejung Chemicals Metals | Orbitech vs. CG Hi Tech | Orbitech vs. Cheryong Industrial CoLtd | Orbitech vs. Nable Communications |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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