Correlation Between Ssangyong Materials and Vina Technology
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Vina Technology 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 Vina Technology 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 Vina Technology Co, you can compare the effects of market volatilities on Ssangyong Materials and Vina Technology 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 Vina Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Vina Technology.
Diversification Opportunities for Ssangyong Materials and Vina Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ssangyong and Vina is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Vina Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina Technology 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 Vina Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina Technology has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Vina Technology go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Vina Technology
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 1.18 times more return on investment than Vina Technology. However, Ssangyong Materials is 1.18 times more volatile than Vina Technology Co. It trades about 0.02 of its potential returns per unit of risk. Vina Technology Co is currently generating about 0.0 per unit of risk. If you would invest 248,339 in Ssangyong Materials Corp on October 13, 2024 and sell it today you would lose (6,339) from holding Ssangyong Materials Corp or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Vina Technology Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Vina Technology |
Ssangyong Materials and Vina Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Vina Technology
The main advantage of trading using opposite Ssangyong Materials and Vina Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Vina Technology 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 Vina Technology will offset losses from the drop in Vina Technology's long position.| Ssangyong Materials vs. Korea Alcohol Industrial | Ssangyong Materials vs. Korean Reinsurance Co | Ssangyong Materials vs. J Steel Co | Ssangyong Materials vs. Samsung Life Insurance |
| Vina Technology vs. Dongbu Insurance Co | Vina Technology vs. EV Advanced Material | Vina Technology vs. Ssangyong Materials Corp | Vina Technology vs. Hyosung Advanced Materials |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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