Correlation Between Shinil Industrial and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both Shinil Industrial and Solution Advanced 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 Shinil Industrial and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinil Industrial Co and Solution Advanced Technology, you can compare the effects of market volatilities on Shinil Industrial and Solution Advanced 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 Shinil Industrial with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Industrial and Solution Advanced.
Diversification Opportunities for Shinil Industrial and Solution Advanced
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinil and Solution is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Industrial Co and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced and Shinil Industrial 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 Shinil Industrial Co are associated (or correlated) with Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of Shinil Industrial i.e., Shinil Industrial and Solution Advanced go up and down completely randomly.
Pair Corralation between Shinil Industrial and Solution Advanced
Assuming the 90 days trading horizon Shinil Industrial Co is expected to under-perform the Solution Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Industrial Co is 6.58 times less risky than Solution Advanced. The stock trades about -0.02 of its potential returns per unit of risk. The Solution Advanced Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 131,200 in Solution Advanced Technology on October 29, 2024 and sell it today you would earn a total of 18,600 from holding Solution Advanced Technology or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Industrial Co vs. Solution Advanced Technology
Performance |
| Timeline |
| Shinil Industrial |
| Solution Advanced |
Shinil Industrial and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Industrial and Solution Advanced
The main advantage of trading using opposite Shinil Industrial and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Industrial position performs unexpectedly, Solution Advanced 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 Solution Advanced will offset losses from the drop in Solution Advanced's long position.| Shinil Industrial vs. Duksan Hi Metal | Shinil Industrial vs. PJ Metal Co | Shinil Industrial vs. Hanjoo Light Metal | Shinil Industrial vs. Choil Aluminum |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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