Correlation Between Solution Advanced and Hyundai Mobis
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Hyundai Mobis 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 Hyundai Mobis 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 Hyundai Mobis, you can compare the effects of market volatilities on Solution Advanced and Hyundai Mobis 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 Hyundai Mobis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Hyundai Mobis.
Diversification Opportunities for Solution Advanced and Hyundai Mobis
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solution and Hyundai is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Hyundai Mobis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Mobis 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 Hyundai Mobis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Mobis has no effect on the direction of Solution Advanced i.e., Solution Advanced and Hyundai Mobis go up and down completely randomly.
Pair Corralation between Solution Advanced and Hyundai Mobis
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Hyundai Mobis. In addition to that, Solution Advanced is 1.68 times more volatile than Hyundai Mobis. It trades about -0.03 of its total potential returns per unit of risk. Hyundai Mobis is currently generating about 0.05 per unit of volatility. If you would invest 21,912,900 in Hyundai Mobis on September 2, 2024 and sell it today you would earn a total of 2,037,100 from holding Hyundai Mobis or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Hyundai Mobis
Performance |
| Timeline |
| Solution Advanced |
| Hyundai Mobis |
Solution Advanced and Hyundai Mobis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Hyundai Mobis
The main advantage of trading using opposite Solution Advanced and Hyundai Mobis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Hyundai Mobis 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 Hyundai Mobis will offset losses from the drop in Hyundai Mobis' long position.| Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. LG Energy Solution | Solution Advanced vs. SK Hynix |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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