Correlation Between Ssangyong Materials and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and LG Chemicals 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 LG Chemicals 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 LG Chemicals, you can compare the effects of market volatilities on Ssangyong Materials and LG Chemicals 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 LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and LG Chemicals.
Diversification Opportunities for Ssangyong Materials and LG Chemicals
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ssangyong and 051910 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals 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 LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and LG Chemicals go up and down completely randomly.
Pair Corralation between Ssangyong Materials and LG Chemicals
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 1.2 times more return on investment than LG Chemicals. However, Ssangyong Materials is 1.2 times more volatile than LG Chemicals. It trades about 0.1 of its potential returns per unit of risk. LG Chemicals is currently generating about -0.06 per unit of risk. If you would invest 211,500 in Ssangyong Materials Corp on August 31, 2024 and sell it today you would earn a total of 31,500 from holding Ssangyong Materials Corp or generate 14.89% 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. LG Chemicals
Performance |
| Timeline |
| Ssangyong Materials Corp |
| LG Chemicals |
Ssangyong Materials and LG Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and LG Chemicals
The main advantage of trading using opposite Ssangyong Materials and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, LG Chemicals 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 LG Chemicals will offset losses from the drop in LG Chemicals' long position.| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
| LG Chemicals vs. Orbitech Co | LG Chemicals vs. Shinsung Delta Tech | LG Chemicals vs. Sungchang Autotech Co | LG Chemicals vs. ECSTELECOM 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |