Correlation Between Solus Advanced and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both Solus Advanced 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 Solus Advanced and Ssangyong Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solus Advanced Materials and Ssangyong Materials Corp, you can compare the effects of market volatilities on Solus Advanced 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 Solus Advanced with a short position of Ssangyong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solus Advanced and Ssangyong Materials.
Diversification Opportunities for Solus Advanced and Ssangyong Materials
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solus and Ssangyong is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Solus Advanced Materials 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 Solus Advanced 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 Solus Advanced Materials 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 Solus Advanced i.e., Solus Advanced and Ssangyong Materials go up and down completely randomly.
Pair Corralation between Solus Advanced and Ssangyong Materials
Assuming the 90 days trading horizon Solus Advanced Materials is expected to under-perform the Ssangyong Materials. In addition to that, Solus Advanced is 1.01 times more volatile than Ssangyong Materials Corp. It trades about -0.02 of its total potential returns per unit of risk. Ssangyong Materials Corp is currently generating about 0.01 per unit of volatility. If you would invest 280,925 in Ssangyong Materials Corp on October 26, 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 |
Solus Advanced Materials vs. Ssangyong Materials Corp
Performance |
| Timeline |
| Solus Advanced Materials |
| Ssangyong Materials Corp |
Solus Advanced and Ssangyong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solus Advanced and Ssangyong Materials
The main advantage of trading using opposite Solus Advanced and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solus Advanced 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.| Solus Advanced vs. Solution Advanced Technology | Solus Advanced vs. Dongwoon Anatech Co | Solus Advanced vs. Raontech | Solus Advanced vs. NewFlex Technology Co |
| Ssangyong Materials vs. KB Financial Group | Ssangyong Materials vs. Shinhan Financial Group | Ssangyong Materials vs. Hana Financial | Ssangyong Materials vs. Woori Financial Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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