Correlation Between ITM Semiconductor and Ssangyong Information

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

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

Diversification Opportunities for ITM Semiconductor and Ssangyong Information

-0.35

Correlation Coefficient

ITM Semiconductor  Ssangyong Information

Very good diversification

The 3 months correlation between ITM and Ssangyong is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and ITM Semiconductor 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 ITM Semiconductor Co 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 ITM Semiconductor i.e., ITM Semiconductor and Ssangyong Information go up and down completely randomly.

Pair Corralation between ITM Semiconductor and Ssangyong Information

Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Ssangyong Information. In addition to that, ITM Semiconductor is 1.18 times more volatile than Ssangyong Information Communication. It trades about -0.13 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.05 per unit of volatility. If you would invest  62,300  in Ssangyong Information Communication on September 22, 2024 and sell it today you would earn a total of  1,300  from holding Ssangyong Information Communication or generate 2.09% return on investment over 90 days.

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

ITM Semiconductor Co  vs.  Ssangyong Information Communic

ITM Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ITM Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ssangyong Information

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ssangyong Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ITM Semiconductor and Ssangyong Information

The main advantage of trading using opposite ITM Semiconductor and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor 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.

The idea behind ITM Semiconductor Co and Ssangyong Information Communication 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.