Correlation Between Solution Advanced and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Woori Technology 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 Woori Technology 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 Woori Technology, you can compare the effects of market volatilities on Solution Advanced and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Woori Technology.
Diversification Opportunities for Solution Advanced and Woori Technology
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solution and Woori is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology has no effect on the direction of Solution Advanced i.e., Solution Advanced and Woori Technology go up and down completely randomly.
Pair Corralation between Solution Advanced and Woori Technology
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 0.91 times more return on investment than Woori Technology. However, Solution Advanced Technology is 1.1 times less risky than Woori Technology. It trades about 0.02 of its potential returns per unit of risk. Woori Technology is currently generating about 0.0 per unit of risk. If you would invest 149,200 in Solution Advanced Technology on November 2, 2024 and sell it today you would earn a total of 600.00 from holding Solution Advanced Technology or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Woori Technology
Performance |
| Timeline |
| Solution Advanced |
| Woori Technology |
Solution Advanced and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Woori Technology
The main advantage of trading using opposite Solution Advanced and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Solution Advanced vs. LG Electronics | Solution Advanced vs. Lotte Data Communication | Solution Advanced vs. ABOV Semiconductor Co | Solution Advanced vs. Samji Electronics Co |
| Woori Technology vs. DataSolution | Woori Technology vs. PJ Metal Co | Woori Technology vs. Formetal Co | Woori Technology vs. Jeong Moon Information |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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