Correlation Between Solution Advanced and Aju IB
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Aju IB 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 Aju IB 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 Aju IB Investment, you can compare the effects of market volatilities on Solution Advanced and Aju IB 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 Aju IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Aju IB.
Diversification Opportunities for Solution Advanced and Aju IB
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solution and Aju is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Aju IB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aju IB Investment 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 Aju IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aju IB Investment has no effect on the direction of Solution Advanced i.e., Solution Advanced and Aju IB go up and down completely randomly.
Pair Corralation between Solution Advanced and Aju IB
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Aju IB. But the stock apears to be less risky and, when comparing its historical volatility, Solution Advanced Technology is 1.21 times less risky than Aju IB. The stock trades about -0.07 of its potential returns per unit of risk. The Aju IB Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 241,190 in Aju IB Investment on September 1, 2024 and sell it today you would earn a total of 39,810 from holding Aju IB Investment or generate 16.51% 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. Aju IB Investment
Performance |
| Timeline |
| Solution Advanced |
| Aju IB Investment |
Solution Advanced and Aju IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Aju IB
The main advantage of trading using opposite Solution Advanced and Aju IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Aju IB 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 Aju IB will offset losses from the drop in Aju IB'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 |
| Aju IB vs. Atinum Investment Co | Aju IB vs. SBI Investment KOREA | Aju IB vs. Daesung Private Equity | Aju IB 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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