Correlation Between Solution Advanced and Youl Chon
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Youl Chon 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 Solution Advanced and Youl Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Advanced Technology and Youl Chon Chemical, you can compare the effects of market volatilities on Solution Advanced and Youl Chon 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 Solution Advanced with a short position of Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Youl Chon.
Diversification Opportunities for Solution Advanced and Youl Chon
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solution and Youl is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Youl Chon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youl Chon Chemical and Solution 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 Solution Advanced Technology are associated (or correlated) with Youl Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youl Chon Chemical has no effect on the direction of Solution Advanced i.e., Solution Advanced and Youl Chon go up and down completely randomly.
Pair Corralation between Solution Advanced and Youl Chon
Assuming the 90 days trading horizon Solution Advanced is expected to generate 3.32 times less return on investment than Youl Chon. But when comparing it to its historical volatility, Solution Advanced Technology is 1.32 times less risky than Youl Chon. It trades about 0.22 of its potential returns per unit of risk. Youl Chon Chemical is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 2,070,000 in Youl Chon Chemical on October 31, 2024 and sell it today you would earn a total of 1,190,000 from holding Youl Chon Chemical or generate 57.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Youl Chon Chemical
Performance |
| Timeline |
| Solution Advanced |
| Youl Chon Chemical |
Solution Advanced and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Youl Chon
The main advantage of trading using opposite Solution Advanced and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Youl Chon 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 Youl Chon will offset losses from the drop in Youl Chon's long position.| Solution Advanced vs. Ssangyong Information Communication | Solution Advanced vs. Nice Information Telecommunication | Solution Advanced vs. CG Hi Tech | Solution Advanced vs. Sangsin Energy Display |
| Youl Chon vs. Anam Electronics Co | Youl Chon vs. Daejung Chemicals Metals | Youl Chon vs. PJ Electronics Co | Youl Chon vs. ABCO Electronics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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