Correlation Between Ssangyong Materials and Solus Advanced
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials and Solus 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 Solus 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 Solus Advanced Materials, you can compare the effects of market volatilities on Ssangyong Materials and Solus 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 Solus Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and Solus Advanced.
Diversification Opportunities for Ssangyong Materials and Solus Advanced
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ssangyong and Solus is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and Solus Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solus Advanced Materials 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 Solus Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solus Advanced Materials has no effect on the direction of Ssangyong Materials i.e., Ssangyong Materials and Solus Advanced go up and down completely randomly.
Pair Corralation between Ssangyong Materials and Solus Advanced
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to generate 0.99 times more return on investment than Solus Advanced. However, Ssangyong Materials Corp is 1.01 times less risky than Solus Advanced. It trades about 0.01 of its potential returns per unit of risk. Solus Advanced Materials is currently generating about -0.02 per unit of risk. If you would invest 280,925 in Ssangyong Materials Corp on October 27, 2024 and sell it today you would lose (53,425) from holding Ssangyong Materials Corp or give up 19.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. Solus Advanced Materials
Performance |
| Timeline |
| Ssangyong Materials Corp |
| Solus Advanced Materials |
Ssangyong Materials and Solus Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and Solus Advanced
The main advantage of trading using opposite Ssangyong Materials and Solus Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials position performs unexpectedly, Solus 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 Solus Advanced will offset losses from the drop in Solus Advanced's long position.| Ssangyong Materials vs. KB Financial Group | Ssangyong Materials vs. Shinhan Financial Group | Ssangyong Materials vs. Hana Financial | Ssangyong Materials vs. Woori Financial Group |
| Solus Advanced vs. Solution Advanced Technology | Solus Advanced vs. Dongwoon Anatech Co | Solus Advanced vs. Raontech | Solus Advanced vs. NewFlex Technology Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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