Correlation Between Solution Advanced and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Dongil 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 Dongil 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 Dongil Technology, you can compare the effects of market volatilities on Solution Advanced and Dongil 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Dongil Technology.
Diversification Opportunities for Solution Advanced and Dongil Technology
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Dongil is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Solution Advanced i.e., Solution Advanced and Dongil Technology go up and down completely randomly.
Pair Corralation between Solution Advanced and Dongil Technology
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 2.19 times more return on investment than Dongil Technology. However, Solution Advanced is 2.19 times more volatile than Dongil Technology. It trades about 0.07 of its potential returns per unit of risk. Dongil Technology is currently generating about -0.29 per unit of risk. If you would invest 150,500 in Solution Advanced Technology on September 1, 2024 and sell it today you would earn a total of 3,700 from holding Solution Advanced Technology or generate 2.46% 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. Dongil Technology
Performance |
| Timeline |
| Solution Advanced |
| Dongil Technology |
Solution Advanced and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Dongil Technology
The main advantage of trading using opposite Solution Advanced and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Dongil 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 Dongil Technology will offset losses from the drop in Dongil Technology'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 |
| Dongil Technology vs. Dongsin Engineering Construction | Dongil Technology vs. Doosan Fuel Cell | Dongil Technology vs. Daishin Balance 1 | Dongil Technology vs. Total Soft Bank |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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