Correlation Between Solution Advanced and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Guyoung 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 Guyoung 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 Guyoung Technology Co, you can compare the effects of market volatilities on Solution Advanced and Guyoung 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 Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Guyoung Technology.
Diversification Opportunities for Solution Advanced and Guyoung Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Guyoung is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung 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 Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Solution Advanced i.e., Solution Advanced and Guyoung Technology go up and down completely randomly.
Pair Corralation between Solution Advanced and Guyoung Technology
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 1.21 times more return on investment than Guyoung Technology. However, Solution Advanced is 1.21 times more volatile than Guyoung Technology Co. It trades about -0.07 of its potential returns per unit of risk. Guyoung Technology Co is currently generating about -0.16 per unit of risk. If you would invest 160,200 in Solution Advanced Technology on September 13, 2024 and sell it today you would lose (15,200) from holding Solution Advanced Technology or give up 9.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Guyoung Technology Co
Performance |
| Timeline |
| Solution Advanced |
| Guyoung Technology |
Solution Advanced and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Guyoung Technology
The main advantage of trading using opposite Solution Advanced and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Guyoung 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 Guyoung Technology will offset losses from the drop in Guyoung 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 |
| Guyoung Technology vs. Daou Data Corp | Guyoung Technology vs. Solution Advanced Technology | Guyoung Technology vs. Busan Industrial Co | Guyoung Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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