Correlation Between FoodNamoo and Solution Advanced

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Can any of the company-specific risk be diversified away by investing in both FoodNamoo 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 FoodNamoo and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and Solution Advanced Technology, you can compare the effects of market volatilities on FoodNamoo 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 FoodNamoo with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and Solution Advanced.

Diversification Opportunities for FoodNamoo and Solution Advanced

FoodNamooSolutionDiversified AwayFoodNamooSolutionDiversified Away100%
-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between FoodNamoo and Solution is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced and FoodNamoo 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 FoodNamoo 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 FoodNamoo i.e., FoodNamoo and Solution Advanced go up and down completely randomly.

Pair Corralation between FoodNamoo and Solution Advanced

Assuming the 90 days trading horizon FoodNamoo is expected to generate 44.25 times less return on investment than Solution Advanced. But when comparing it to its historical volatility, FoodNamoo is 4.69 times less risky than Solution Advanced. It trades about 0.03 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  143,000  in Solution Advanced Technology on November 21, 2024 and sell it today you would earn a total of  101,500  from holding Solution Advanced Technology or generate 70.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

FoodNamoo  vs.  Solution Advanced Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 050100
JavaScript chart by amCharts 3.21.15290720 351320
       Timeline  
FoodNamoo 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days FoodNamoo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2,5003,0003,5004,000
Solution Advanced 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Solution Advanced Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Solution Advanced sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1,5002,0002,5003,000

FoodNamoo and Solution Advanced Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.6-3.44-2.29-1.140.01.02.023.044.075.1 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15290720 351320
       Returns  

Pair Trading with FoodNamoo and Solution Advanced

The main advantage of trading using opposite FoodNamoo and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo 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.
The idea behind FoodNamoo and Solution Advanced Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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