Correlation Between Ssangyong Materials and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Hyosung Advanced 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 Hyosung Advanced 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 Hyosung Advanced Materials, you can compare the effects of market volatilities on Ssangyong Materials and Hyosung Advanced 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 Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Hyosung Advanced.
Diversification Opportunities for Ssangyong Materials and Hyosung Advanced
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssangyong and Hyosung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat 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 Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Hyosung Advanced go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Hyosung Advanced
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 0.92 times more return on investment than Hyosung Advanced. However, Ssangyong Materials Corp is 1.08 times less risky than Hyosung Advanced. It trades about 0.02 of its potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.27 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. Hyosung Advanced Materials
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Hyosung Advanced Mat |
Ssangyong Materials and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Hyosung Advanced
The main advantage of trading using opposite Ssangyong Materials and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
| Hyosung Advanced vs. Daol Investment Securities | Hyosung Advanced vs. TS Investment Corp | Hyosung Advanced vs. Seohee Construction Co | Hyosung Advanced vs. Nh Investment And |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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