Correlation Between LAKE MATERIALS and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and Ssangyong Information 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 LAKE MATERIALS and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAKE MATERIALS LTD and Ssangyong Information Communication, you can compare the effects of market volatilities on LAKE MATERIALS and Ssangyong Information 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 LAKE MATERIALS with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Ssangyong Information.
Diversification Opportunities for LAKE MATERIALS and Ssangyong Information
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LAKE and Ssangyong is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and LAKE 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 LAKE MATERIALS LTD are associated (or correlated) with Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and Ssangyong Information go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Ssangyong Information
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to under-perform the Ssangyong Information. In addition to that, LAKE MATERIALS is 2.93 times more volatile than Ssangyong Information Communication. It trades about -0.18 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.16 per unit of volatility. If you would invest 60,000 in Ssangyong Information Communication on August 31, 2024 and sell it today you would earn a total of 2,500 from holding Ssangyong Information Communication or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Ssangyong Information Communic
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Ssangyong Information |
LAKE MATERIALS and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Ssangyong Information
The main advantage of trading using opposite LAKE MATERIALS and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, Ssangyong Information 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 Information will offset losses from the drop in Ssangyong Information's long position.| LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. LG Energy Solution | LAKE MATERIALS vs. SK Hynix |
| Ssangyong Information vs. Settlebank | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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