Correlation Between Ssangyong Information and Formetal

Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Formetal 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 Information and Formetal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ssangyong Information Communication and Formetal Co, you can compare the effects of market volatilities on Ssangyong Information and Formetal 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 Information with a short position of Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Formetal.

Diversification Opportunities for Ssangyong Information and Formetal

-0.16

Correlation Coefficient

Ssangyong Information  Formetal

Good diversification

The 3 months correlation between Ssangyong and Formetal is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal and Ssangyong Information 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 Information Communication are associated (or correlated) with Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Formetal go up and down completely randomly.

Pair Corralation between Ssangyong Information and Formetal

Assuming the 90 days trading horizon Ssangyong Information Communication is expected to generate 1.18 times more return on investment than Formetal. However, Ssangyong Information is 1.18 times more volatile than Formetal Co. It trades about 0.09 of its potential returns per unit of risk. Formetal Co is currently generating about 0.04 per unit of risk. If you would invest  62,900  in Ssangyong Information Communication on December 27, 2024 and sell it today you would earn a total of  13,100  from holding Ssangyong Information Communication or generate 20.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ssangyong Information Communic  vs.  Formetal Co

Ssangyong Information

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ssangyong Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Formetal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Formetal Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Formetal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ssangyong Information and Formetal

The main advantage of trading using opposite Ssangyong Information and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.

The idea behind Ssangyong Information Communication and Formetal Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .