Correlation Between Ssangyong Materials and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on Ssangyong Materials and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Hanjoo Light.
Diversification Opportunities for Ssangyong Materials and Hanjoo Light
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssangyong and Hanjoo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Hanjoo Light go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Hanjoo Light
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 1.68 times more return on investment than Hanjoo Light. However, Ssangyong Materials is 1.68 times more volatile than Hanjoo Light Metal. It trades about 0.02 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.52 per unit of risk. If you would invest 232,000 in Ssangyong Materials Corp on September 5, 2024 and sell it today you would earn a total of 1,500 from holding Ssangyong Materials Corp or generate 0.65% 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. Hanjoo Light Metal
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Hanjoo Light Metal |
Ssangyong Materials and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Hanjoo Light
The main advantage of trading using opposite Ssangyong Materials and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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