Correlation Between Ssangyong Materials and Daedong Steel
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Daedong 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 Daedong 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 Daedong Steel Co, you can compare the effects of market volatilities on Ssangyong Materials and Daedong 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 Daedong Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Daedong Steel.
Diversification Opportunities for Ssangyong Materials and Daedong Steel
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and Daedong is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Daedong Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong 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 Daedong Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Steel has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Daedong Steel go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Daedong Steel
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 1.49 times more return on investment than Daedong Steel. However, Ssangyong Materials is 1.49 times more volatile than Daedong Steel Co. It trades about 0.04 of its potential returns per unit of risk. Daedong Steel Co is currently generating about -0.02 per unit of risk. If you would invest 239,500 in Ssangyong Materials Corp on August 31, 2024 and sell it today you would earn a total of 3,500 from holding Ssangyong Materials Corp or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Daedong Steel Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Daedong Steel |
Ssangyong Materials and Daedong Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Daedong Steel
The main advantage of trading using opposite Ssangyong Materials and Daedong Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Daedong 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 Daedong Steel will offset losses from the drop in Daedong 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 |
| Daedong Steel vs. Keum Kang Steel | Daedong Steel vs. Tplex Co | Daedong Steel vs. PJ Metal Co | Daedong Steel vs. Samhyun Steel Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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