Correlation Between MS Autotech and SOLiD
Can any of the company-specific risk be diversified away by investing in both MS Autotech and SOLiD 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 MS Autotech and SOLiD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MS Autotech CoLtd and SOLiD Inc, you can compare the effects of market volatilities on MS Autotech and SOLiD 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 MS Autotech with a short position of SOLiD. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and SOLiD.
Diversification Opportunities for MS Autotech and SOLiD
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 123040 and SOLiD is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and SOLiD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLiD Inc and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with SOLiD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLiD Inc has no effect on the direction of MS Autotech i.e., MS Autotech and SOLiD go up and down completely randomly.
Pair Corralation between MS Autotech and SOLiD
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the SOLiD. In addition to that, MS Autotech is 1.21 times more volatile than SOLiD Inc. It trades about -0.12 of its total potential returns per unit of risk. SOLiD Inc is currently generating about 0.1 per unit of volatility. If you would invest 454,500 in SOLiD Inc on September 12, 2024 and sell it today you would earn a total of 65,500 from holding SOLiD Inc or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. SOLiD Inc
Performance |
| Timeline |
| MS Autotech CoLtd |
| SOLiD Inc |
MS Autotech and SOLiD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and SOLiD
The main advantage of trading using opposite MS Autotech and SOLiD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, SOLiD 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 SOLiD will offset losses from the drop in SOLiD's long position.| MS Autotech vs. Daou Data Corp | MS Autotech vs. Solution Advanced Technology | MS Autotech vs. Busan Industrial Co | MS Autotech vs. Busan Ind |
| SOLiD vs. Atinum Investment Co | SOLiD vs. Wireless Power Amplifier | SOLiD vs. DSC Investment | SOLiD vs. Samyung Trading 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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