Correlation Between Solution Advanced and Nuintek CoLtd
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Nuintek CoLtd 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 Nuintek CoLtd 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 Nuintek CoLtd, you can compare the effects of market volatilities on Solution Advanced and Nuintek CoLtd 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 Nuintek CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Nuintek CoLtd.
Diversification Opportunities for Solution Advanced and Nuintek CoLtd
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solution and Nuintek is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Nuintek CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuintek CoLtd 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 Nuintek CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuintek CoLtd has no effect on the direction of Solution Advanced i.e., Solution Advanced and Nuintek CoLtd go up and down completely randomly.
Pair Corralation between Solution Advanced and Nuintek CoLtd
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 1.94 times more return on investment than Nuintek CoLtd. However, Solution Advanced is 1.94 times more volatile than Nuintek CoLtd. It trades about 0.03 of its potential returns per unit of risk. Nuintek CoLtd is currently generating about -0.19 per unit of risk. If you would invest 149,200 in Solution Advanced Technology on September 3, 2024 and sell it today you would earn a total of 5,000 from holding Solution Advanced Technology or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Nuintek CoLtd
Performance |
| Timeline |
| Solution Advanced |
| Nuintek CoLtd |
Solution Advanced and Nuintek CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Nuintek CoLtd
The main advantage of trading using opposite Solution Advanced and Nuintek CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Nuintek CoLtd 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 Nuintek CoLtd will offset losses from the drop in Nuintek CoLtd's long position.| Solution Advanced vs. LB Investment | Solution Advanced vs. Lindeman Asia Investment | Solution Advanced vs. FoodNamoo | Solution Advanced vs. Korea Investment Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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