Correlation Between Solution Advanced and SGC ETEC
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and SGC ETEC 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 SGC ETEC 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 SGC eTEC EC, you can compare the effects of market volatilities on Solution Advanced and SGC ETEC 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 SGC ETEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and SGC ETEC.
Diversification Opportunities for Solution Advanced and SGC ETEC
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solution and SGC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and SGC eTEC EC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGC eTEC EC 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 SGC ETEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGC eTEC EC has no effect on the direction of Solution Advanced i.e., Solution Advanced and SGC ETEC go up and down completely randomly.
Pair Corralation between Solution Advanced and SGC ETEC
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the SGC ETEC. In addition to that, Solution Advanced is 1.61 times more volatile than SGC eTEC EC. It trades about -0.08 of its total potential returns per unit of risk. SGC eTEC EC is currently generating about -0.09 per unit of volatility. If you would invest 1,971,000 in SGC eTEC EC on September 12, 2024 and sell it today you would lose (737,000) from holding SGC eTEC EC or give up 37.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Solution Advanced Technology vs. SGC eTEC EC
Performance |
| Timeline |
| Solution Advanced |
| SGC eTEC EC |
Solution Advanced and SGC ETEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and SGC ETEC
The main advantage of trading using opposite Solution Advanced and SGC ETEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, SGC ETEC 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 SGC ETEC will offset losses from the drop in SGC ETEC's 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 |
| SGC ETEC vs. Korea New Network | SGC ETEC vs. Solution Advanced Technology | SGC ETEC vs. Busan Industrial Co | SGC ETEC vs. Busan Ind |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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