Correlation Between Solution Advanced and Hyundai Rotem
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Hyundai Rotem 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 Hyundai Rotem 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 Hyundai Rotem Co, you can compare the effects of market volatilities on Solution Advanced and Hyundai Rotem 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 Hyundai Rotem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Hyundai Rotem.
Diversification Opportunities for Solution Advanced and Hyundai Rotem
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solution and Hyundai is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Hyundai Rotem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Rotem 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 Hyundai Rotem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Rotem has no effect on the direction of Solution Advanced i.e., Solution Advanced and Hyundai Rotem go up and down completely randomly.
Pair Corralation between Solution Advanced and Hyundai Rotem
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Hyundai Rotem. But the stock apears to be less risky and, when comparing its historical volatility, Solution Advanced Technology is 1.0 times less risky than Hyundai Rotem. The stock trades about -0.16 of its potential returns per unit of risk. The Hyundai Rotem Co is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 4,835,000 in Hyundai Rotem Co on October 21, 2024 and sell it today you would earn a total of 835,000 from holding Hyundai Rotem Co or generate 17.27% 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. Hyundai Rotem Co
Performance |
| Timeline |
| Solution Advanced |
| Hyundai Rotem |
Solution Advanced and Hyundai Rotem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Hyundai Rotem
The main advantage of trading using opposite Solution Advanced and Hyundai Rotem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Hyundai Rotem 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 Hyundai Rotem will offset losses from the drop in Hyundai Rotem's long position.| Solution Advanced vs. SEOWONINTECHCoLtd | Solution Advanced vs. Moonbae Steel | Solution Advanced vs. Vitzro Tech Co | Solution Advanced vs. Seah Steel Corp |
| Hyundai Rotem vs. Hankuk Steel Wire | Hyundai Rotem vs. Wonil Special Steel | Hyundai Rotem vs. Daehan Steel | Hyundai Rotem vs. J Steel Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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