Correlation Between Solution Advanced and Seohee Construction
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Seohee Construction 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 Seohee Construction 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 Seohee Construction Co, you can compare the effects of market volatilities on Solution Advanced and Seohee Construction 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 Seohee Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Seohee Construction.
Diversification Opportunities for Solution Advanced and Seohee Construction
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solution and Seohee is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Seohee Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seohee Construction 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 Seohee Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seohee Construction has no effect on the direction of Solution Advanced i.e., Solution Advanced and Seohee Construction go up and down completely randomly.
Pair Corralation between Solution Advanced and Seohee Construction
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Seohee Construction. In addition to that, Solution Advanced is 2.13 times more volatile than Seohee Construction Co. It trades about -0.02 of its total potential returns per unit of risk. Seohee Construction Co is currently generating about 0.06 per unit of volatility. If you would invest 106,840 in Seohee Construction Co on September 14, 2024 and sell it today you would earn a total of 54,860 from holding Seohee Construction Co or generate 51.35% 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. Seohee Construction Co
Performance |
| Timeline |
| Solution Advanced |
| Seohee Construction |
Solution Advanced and Seohee Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Seohee Construction
The main advantage of trading using opposite Solution Advanced and Seohee Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Seohee Construction 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 Seohee Construction will offset losses from the drop in Seohee Construction'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 |
| Seohee Construction vs. Korea New Network | Seohee Construction vs. Solution Advanced Technology | Seohee Construction vs. Busan Industrial Co | Seohee Construction 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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