Correlation Between SOLiD and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both SOLiD and Seoam Machinery 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 SOLiD and Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOLiD Inc and Seoam Machinery Industry, you can compare the effects of market volatilities on SOLiD and Seoam Machinery 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 SOLiD with a short position of Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLiD and Seoam Machinery.
Diversification Opportunities for SOLiD and Seoam Machinery
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SOLiD and Seoam is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SOLiD Inc and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry and SOLiD 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 SOLiD Inc are associated (or correlated) with Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of SOLiD i.e., SOLiD and Seoam Machinery go up and down completely randomly.
Pair Corralation between SOLiD and Seoam Machinery
Assuming the 90 days trading horizon SOLiD Inc is expected to generate 0.84 times more return on investment than Seoam Machinery. However, SOLiD Inc is 1.19 times less risky than Seoam Machinery. It trades about 0.28 of its potential returns per unit of risk. Seoam Machinery Industry is currently generating about 0.04 per unit of risk. If you would invest 437,000 in SOLiD Inc on August 31, 2024 and sell it today you would earn a total of 60,000 from holding SOLiD Inc or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SOLiD Inc vs. Seoam Machinery Industry
Performance |
| Timeline |
| SOLiD Inc |
| Seoam Machinery Industry |
SOLiD and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLiD and Seoam Machinery
The main advantage of trading using opposite SOLiD and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLiD position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| SOLiD vs. Seoam Machinery Industry | SOLiD vs. FNC Entertainment Co | SOLiD vs. Digital Multimedia Technology | SOLiD vs. Dongwoo Farm To |
| Seoam Machinery vs. YG Entertainment | Seoam Machinery vs. Iljin Display | Seoam Machinery vs. KIWI Media Group | Seoam Machinery vs. Daishin Information Communications |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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