Correlation Between Samick Musical and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both Samick Musical 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 Samick Musical and Ssangyong Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and Ssangyong Materials Corp, you can compare the effects of market volatilities on Samick Musical 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 Samick Musical with a short position of Ssangyong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Ssangyong Materials.
Diversification Opportunities for Samick Musical and Ssangyong Materials
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samick and Ssangyong is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments 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 Samick Musical 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 Samick Musical Instruments 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 Samick Musical i.e., Samick Musical and Ssangyong Materials go up and down completely randomly.
Pair Corralation between Samick Musical and Ssangyong Materials
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 0.59 times more return on investment than Ssangyong Materials. However, Samick Musical Instruments is 1.7 times less risky than Ssangyong Materials. It trades about 0.24 of its potential returns per unit of risk. Ssangyong Materials Corp is currently generating about 0.05 per unit of risk. If you would invest 110,700 in Samick Musical Instruments on September 19, 2024 and sell it today you would earn a total of 12,300 from holding Samick Musical Instruments or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samick Musical Instruments vs. Ssangyong Materials Corp
Performance |
Timeline |
Samick Musical Instr |
Ssangyong Materials Corp |
Samick Musical and Ssangyong Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samick Musical and Ssangyong Materials
The main advantage of trading using opposite Samick Musical and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical 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.Samick Musical vs. Samsung Electronics Co | Samick Musical vs. Samsung Electronics Co | Samick Musical vs. SK Hynix | Samick Musical vs. POSCO Holdings |
Ssangyong Materials vs. Samsung Electronics Co | Ssangyong Materials vs. Samsung Electronics Co | Ssangyong Materials vs. SK Hynix | Ssangyong Materials vs. POSCO Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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