Correlation Between Daedong Steel and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both Daedong Steel and Ssangyong 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 Daedong Steel and Ssangyong Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daedong Steel Co and Ssangyong Materials Corp, you can compare the effects of market volatilities on Daedong Steel and Ssangyong 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 Daedong Steel with a short position of Ssangyong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daedong Steel and Ssangyong Materials.
Diversification Opportunities for Daedong Steel and Ssangyong Materials
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daedong and Ssangyong is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Daedong Steel Co and Ssangyong Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Materials Corp and Daedong Steel 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 Daedong Steel Co are associated (or correlated) with Ssangyong Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Materials Corp has no effect on the direction of Daedong Steel i.e., Daedong Steel and Ssangyong Materials go up and down completely randomly.
Pair Corralation between Daedong Steel and Ssangyong Materials
Assuming the 90 days trading horizon Daedong Steel Co is expected to under-perform the Ssangyong Materials. But the stock apears to be less risky and, when comparing its historical volatility, Daedong Steel Co is 1.43 times less risky than Ssangyong Materials. The stock trades about -0.11 of its potential returns per unit of risk. The Ssangyong Materials Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 211,500 in Ssangyong Materials Corp on September 2, 2024 and sell it today you would earn a total of 27,500 from holding Ssangyong Materials Corp or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daedong Steel Co vs. Ssangyong Materials Corp
Performance |
| Timeline |
| Daedong Steel |
| Ssangyong Materials Corp |
Daedong Steel and Ssangyong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daedong Steel and Ssangyong Materials
The main advantage of trading using opposite Daedong Steel and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daedong Steel position performs unexpectedly, Ssangyong 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 Ssangyong Materials will offset losses from the drop in Ssangyong Materials' long position.| Daedong Steel vs. Keum Kang Steel | Daedong Steel vs. Tplex Co | Daedong Steel vs. Jeil Steel Mfg | Daedong Steel vs. Wonil Special Steel |
| Ssangyong Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |