Correlation Between Ssangyong Materials and Innowireless
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Innowireless 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 Innowireless 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 Innowireless Co, you can compare the effects of market volatilities on Ssangyong Materials and Innowireless 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 Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Innowireless.
Diversification Opportunities for Ssangyong Materials and Innowireless
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ssangyong and Innowireless is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless 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 Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Innowireless go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Innowireless
Assuming the 90 days trading horizon Ssangyong Materials is expected to generate 11.08 times less return on investment than Innowireless. In addition to that, Ssangyong Materials is 1.66 times more volatile than Innowireless Co. It trades about 0.01 of its total potential returns per unit of risk. Innowireless Co is currently generating about 0.16 per unit of volatility. If you would invest 1,709,000 in Innowireless Co on August 29, 2024 and sell it today you would earn a total of 125,000 from holding Innowireless Co or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Innowireless Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Innowireless |
Ssangyong Materials and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Innowireless
The main advantage of trading using opposite Ssangyong Materials and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
| Innowireless vs. AptaBio Therapeutics | Innowireless vs. Daewoo SBI SPAC | Innowireless vs. Dream Security co | Innowireless vs. Microfriend |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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