Correlation Between Solution Advanced and COWAY
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and COWAY 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 COWAY 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 COWAY Co, you can compare the effects of market volatilities on Solution Advanced and COWAY 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 COWAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and COWAY.
Diversification Opportunities for Solution Advanced and COWAY
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Solution and COWAY is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and COWAY Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWAY 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 COWAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWAY has no effect on the direction of Solution Advanced i.e., Solution Advanced and COWAY go up and down completely randomly.
Pair Corralation between Solution Advanced and COWAY
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the COWAY. In addition to that, Solution Advanced is 1.73 times more volatile than COWAY Co. It trades about -0.03 of its total potential returns per unit of risk. COWAY Co is currently generating about 0.03 per unit of volatility. If you would invest 5,825,210 in COWAY Co on September 12, 2024 and sell it today you would earn a total of 1,114,790 from holding COWAY Co or generate 19.14% 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. COWAY Co
Performance |
| Timeline |
| Solution Advanced |
| COWAY |
Solution Advanced and COWAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and COWAY
The main advantage of trading using opposite Solution Advanced and COWAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, COWAY 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 COWAY will offset losses from the drop in COWAY'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 |
| COWAY vs. Daou Data Corp | COWAY vs. Solution Advanced Technology | COWAY vs. Busan Industrial Co | COWAY 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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