Correlation Between Ssangyong Materials and LAKE MATERIALS
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and LAKE MATERIALS 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 LAKE MATERIALS 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 LAKE MATERIALS LTD, you can compare the effects of market volatilities on Ssangyong Materials and LAKE MATERIALS 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 LAKE MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and LAKE MATERIALS.
Diversification Opportunities for Ssangyong Materials and LAKE MATERIALS
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssangyong and LAKE is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and LAKE MATERIALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAKE MATERIALS LTD 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 LAKE MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAKE MATERIALS LTD has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and LAKE MATERIALS go up and down completely randomly.
Pair Corralation between Ssangyong Materials and LAKE MATERIALS
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 1.07 times more return on investment than LAKE MATERIALS. However, Ssangyong Materials is 1.07 times more volatile than LAKE MATERIALS LTD. It trades about 0.03 of its potential returns per unit of risk. LAKE MATERIALS LTD is currently generating about -0.28 per unit of risk. If you would invest 237,000 in Ssangyong Materials Corp on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Ssangyong Materials Corp or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. LAKE MATERIALS LTD
Performance |
| Timeline |
| Ssangyong Materials Corp |
| LAKE MATERIALS LTD |
Ssangyong Materials and LAKE MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and LAKE MATERIALS
The main advantage of trading using opposite Ssangyong Materials and LAKE MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, LAKE MATERIALS 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 LAKE MATERIALS will offset losses from the drop in LAKE MATERIALS's long position.| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
| LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. LG Energy Solution | LAKE MATERIALS 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 CEOs Directory module to screen CEOs from public companies around the world.
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