Correlation Between Insung Information and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both Insung Information 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 Insung Information and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Solution Advanced Technology, you can compare the effects of market volatilities on Insung Information 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 Insung Information with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Solution Advanced.
Diversification Opportunities for Insung Information and Solution Advanced
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insung and Solution is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information 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 Insung 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 Insung Information 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 Insung Information i.e., Insung Information and Solution Advanced go up and down completely randomly.
Pair Corralation between Insung Information and Solution Advanced
Assuming the 90 days trading horizon Insung Information Co is expected to generate 1.11 times more return on investment than Solution Advanced. However, Insung Information is 1.11 times more volatile than Solution Advanced Technology. It trades about 0.07 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about -0.17 per unit of risk. If you would invest 188,700 in Insung Information Co on October 20, 2024 and sell it today you would earn a total of 6,000 from holding Insung Information Co or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Solution Advanced Technology
Performance |
| Timeline |
| Insung Information |
| Solution Advanced |
Insung Information and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Solution Advanced
The main advantage of trading using opposite Insung Information and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information 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.| Insung Information vs. Keyang Electric Machinery | Insung Information vs. Mobileleader CoLtd | Insung Information vs. Digital Power Communications | Insung Information vs. Wireless Power Amplifier |
| Solution Advanced vs. SEOWONINTECHCoLtd | Solution Advanced vs. Moonbae Steel | Solution Advanced vs. Vitzro Tech Co | Solution Advanced vs. Seah Steel Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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