Correlation Between Solution Advanced and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Jinro Distillers 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 Jinro Distillers 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 Jinro Distillers Co, you can compare the effects of market volatilities on Solution Advanced and Jinro Distillers 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 Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Jinro Distillers.
Diversification Opportunities for Solution Advanced and Jinro Distillers
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solution and Jinro is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers 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 Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Solution Advanced i.e., Solution Advanced and Jinro Distillers go up and down completely randomly.
Pair Corralation between Solution Advanced and Jinro Distillers
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 2.92 times more return on investment than Jinro Distillers. However, Solution Advanced is 2.92 times more volatile than Jinro Distillers Co. It trades about 0.09 of its potential returns per unit of risk. Jinro Distillers Co is currently generating about -0.36 per unit of risk. If you would invest 136,900 in Solution Advanced Technology on September 12, 2024 and sell it today you would earn a total of 7,900 from holding Solution Advanced Technology or generate 5.77% 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. Jinro Distillers Co
Performance |
| Timeline |
| Solution Advanced |
| Jinro Distillers |
Solution Advanced and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Jinro Distillers
The main advantage of trading using opposite Solution Advanced and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' 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 |
| Jinro Distillers vs. Korea New Network | Jinro Distillers vs. ICD Co | Jinro Distillers vs. DYPNF CoLtd | Jinro Distillers vs. Solution Advanced Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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