Correlation Between Solution Advanced and Busan Ind
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Busan Ind 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 Busan Ind 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 Busan Ind, you can compare the effects of market volatilities on Solution Advanced and Busan Ind 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 Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Busan Ind.
Diversification Opportunities for Solution Advanced and Busan Ind
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solution and Busan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind 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 Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of Solution Advanced i.e., Solution Advanced and Busan Ind go up and down completely randomly.
Pair Corralation between Solution Advanced and Busan Ind
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Busan Ind. In addition to that, Solution Advanced is 1.22 times more volatile than Busan Ind. It trades about -0.03 of its total potential returns per unit of risk. Busan Ind is currently generating about -0.01 per unit of volatility. If you would invest 8,288,836 in Busan Ind on September 3, 2024 and sell it today you would lose (2,148,836) from holding Busan Ind or give up 25.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Busan Ind
Performance |
| Timeline |
| Solution Advanced |
| Busan Ind |
Solution Advanced and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Busan Ind
The main advantage of trading using opposite Solution Advanced and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.| Solution Advanced vs. LB Investment | Solution Advanced vs. Lindeman Asia Investment | Solution Advanced vs. FoodNamoo | Solution Advanced vs. Korea Investment Holdings |
| Busan Ind vs. FNC Entertainment Co | Busan Ind vs. Semyung Electric Machinery | Busan Ind vs. Jeju Beer Co | Busan Ind vs. Nasmedia 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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