Correlation Between Solution Advanced and TJ Media
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and TJ Media 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 TJ Media 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 TJ media Co, you can compare the effects of market volatilities on Solution Advanced and TJ Media 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 TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and TJ Media.
Diversification Opportunities for Solution Advanced and TJ Media
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and 032540 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media 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 TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Solution Advanced i.e., Solution Advanced and TJ Media go up and down completely randomly.
Pair Corralation between Solution Advanced and TJ Media
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 2.33 times more return on investment than TJ Media. However, Solution Advanced is 2.33 times more volatile than TJ media Co. It trades about 0.03 of its potential returns per unit of risk. TJ media Co is currently generating about -0.01 per unit of risk. If you would invest 139,500 in Solution Advanced Technology on September 14, 2024 and sell it today you would earn a total of 1,900 from holding Solution Advanced Technology or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. TJ media Co
Performance |
| Timeline |
| Solution Advanced |
| TJ media |
Solution Advanced and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and TJ Media
The main advantage of trading using opposite Solution Advanced and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media'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 |
| TJ Media vs. Daou Data Corp | TJ Media vs. Solution Advanced Technology | TJ Media vs. Busan Industrial Co | TJ Media 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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