Correlation Between Solus Advanced and SK IE
Can any of the company-specific risk be diversified away by investing in both Solus Advanced and SK IE 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 Solus Advanced and SK IE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solus Advanced Materials and SK IE Technology, you can compare the effects of market volatilities on Solus Advanced and SK IE 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 Solus Advanced with a short position of SK IE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solus Advanced and SK IE.
Diversification Opportunities for Solus Advanced and SK IE
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Solus and 361610 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Solus Advanced Materials and SK IE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK IE Technology and Solus Advanced 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 Solus Advanced Materials are associated (or correlated) with SK IE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK IE Technology has no effect on the direction of Solus Advanced i.e., Solus Advanced and SK IE go up and down completely randomly.
Pair Corralation between Solus Advanced and SK IE
Assuming the 90 days trading horizon Solus Advanced Materials is expected to generate 1.21 times more return on investment than SK IE. However, Solus Advanced is 1.21 times more volatile than SK IE Technology. It trades about -0.01 of its potential returns per unit of risk. SK IE Technology is currently generating about -0.04 per unit of risk. If you would invest 1,718,505 in Solus Advanced Materials on August 29, 2024 and sell it today you would lose (763,505) from holding Solus Advanced Materials or give up 44.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solus Advanced Materials vs. SK IE Technology
Performance |
| Timeline |
| Solus Advanced Materials |
| SK IE Technology |
Solus Advanced and SK IE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solus Advanced and SK IE
The main advantage of trading using opposite Solus Advanced and SK IE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solus Advanced position performs unexpectedly, SK IE 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 SK IE will offset losses from the drop in SK IE's long position.| Solus Advanced vs. Sewoon Medical Co | Solus Advanced vs. Genie Music | Solus Advanced vs. Daou Technology | Solus Advanced vs. Hana Technology Co |
| SK IE vs. Polaris Office Corp | SK IE vs. Hankook Furniture Co | SK IE vs. ITM Semiconductor Co | SK IE vs. Eugene Investment Securities |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |