Correlation Between Dongwoon Anatech and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both Dongwoon Anatech 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 Dongwoon Anatech and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoon Anatech Co and Solution Advanced Technology, you can compare the effects of market volatilities on Dongwoon Anatech 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 Dongwoon Anatech with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoon Anatech and Solution Advanced.
Diversification Opportunities for Dongwoon Anatech and Solution Advanced
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongwoon and Solution is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoon Anatech 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 Dongwoon Anatech 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 Dongwoon Anatech 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 Dongwoon Anatech i.e., Dongwoon Anatech and Solution Advanced go up and down completely randomly.
Pair Corralation between Dongwoon Anatech and Solution Advanced
Assuming the 90 days trading horizon Dongwoon Anatech is expected to generate 68.61 times less return on investment than Solution Advanced. But when comparing it to its historical volatility, Dongwoon Anatech Co is 3.16 times less risky than Solution Advanced. It trades about 0.02 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 132,600 in Solution Advanced Technology on November 7, 2024 and sell it today you would earn a total of 140,400 from holding Solution Advanced Technology or generate 105.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoon Anatech Co vs. Solution Advanced Technology
Performance |
| Timeline |
| Dongwoon Anatech |
| Solution Advanced |
Dongwoon Anatech and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoon Anatech and Solution Advanced
The main advantage of trading using opposite Dongwoon Anatech and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoon Anatech 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.| Dongwoon Anatech vs. SK Hynix | Dongwoon Anatech vs. LX Semicon Co | Dongwoon Anatech vs. Tokai Carbon Korea | Dongwoon Anatech vs. People Technology |
| Solution Advanced vs. Samsung Life Insurance | Solution Advanced vs. Pan Entertainment Co | Solution Advanced vs. Mobileleader CoLtd | Solution Advanced vs. SK Chemicals Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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