Correlation Between Ssangyong Materials and Yujin Robot
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Yujin Robot 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 Yujin Robot 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 Yujin Robot Co, you can compare the effects of market volatilities on Ssangyong Materials and Yujin Robot 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 Yujin Robot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Yujin Robot.
Diversification Opportunities for Ssangyong Materials and Yujin Robot
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and Yujin is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Yujin Robot Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yujin Robot 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 Yujin Robot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yujin Robot has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Yujin Robot go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Yujin Robot
Assuming the 90 days trading horizon Ssangyong Materials is expected to generate 1.8 times less return on investment than Yujin Robot. But when comparing it to its historical volatility, Ssangyong Materials Corp is 3.12 times less risky than Yujin Robot. It trades about 0.35 of its potential returns per unit of risk. Yujin Robot Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 581,000 in Yujin Robot Co on October 21, 2024 and sell it today you would earn a total of 121,000 from holding Yujin Robot Co or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Yujin Robot Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Yujin Robot |
Ssangyong Materials and Yujin Robot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Yujin Robot
The main advantage of trading using opposite Ssangyong Materials and Yujin Robot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Yujin Robot 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 Yujin Robot will offset losses from the drop in Yujin Robot's long position.The idea behind Ssangyong Materials Corp and Yujin Robot Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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