Correlation Between Solux and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Solux and Hansol Homedeco 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 Solux and Hansol Homedeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solux Co and Hansol Homedeco Co, you can compare the effects of market volatilities on Solux and Hansol Homedeco 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 Solux with a short position of Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solux and Hansol Homedeco.
Diversification Opportunities for Solux and Hansol Homedeco
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solux and Hansol is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Solux Co and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco and Solux 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 Solux Co are associated (or correlated) with Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Solux i.e., Solux and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Solux and Hansol Homedeco
Assuming the 90 days trading horizon Solux Co is expected to generate 5.21 times more return on investment than Hansol Homedeco. However, Solux is 5.21 times more volatile than Hansol Homedeco Co. It trades about 0.07 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.07 per unit of risk. If you would invest 227,967 in Solux Co on August 29, 2024 and sell it today you would earn a total of 635,033 from holding Solux Co or generate 278.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.86% |
| Values | Daily Returns |
Solux Co vs. Hansol Homedeco Co
Performance |
| Timeline |
| Solux |
| Hansol Homedeco |
Solux and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solux and Hansol Homedeco
The main advantage of trading using opposite Solux and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solux position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Solux vs. Eugene Technology CoLtd | Solux vs. Ilji Technology Co | Solux vs. Global Standard Technology | Solux vs. Seoam Machinery Industry |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Daewoo SBI SPAC | Hansol Homedeco vs. Dream Security co | Hansol Homedeco vs. Microfriend |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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