Correlation Between Solution Advanced and Next Bt
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Next Bt 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 Next Bt 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 Next Bt Co, you can compare the effects of market volatilities on Solution Advanced and Next Bt 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 Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Next Bt.
Diversification Opportunities for Solution Advanced and Next Bt
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Next is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt 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 Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of Solution Advanced i.e., Solution Advanced and Next Bt go up and down completely randomly.
Pair Corralation between Solution Advanced and Next Bt
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 0.81 times more return on investment than Next Bt. However, Solution Advanced Technology is 1.24 times less risky than Next Bt. It trades about -0.03 of its potential returns per unit of risk. Next Bt Co is currently generating about -0.04 per unit of risk. If you would invest 295,782 in Solution Advanced Technology on September 12, 2024 and sell it today you would lose (150,982) from holding Solution Advanced Technology or give up 51.05% 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. Next Bt Co
Performance |
| Timeline |
| Solution Advanced |
| Next Bt |
Solution Advanced and Next Bt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Next Bt
The main advantage of trading using opposite Solution Advanced and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt'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 |
| Next Bt vs. Korea New Network | Next Bt vs. ICD Co | Next Bt vs. DYPNF CoLtd | Next Bt vs. Solution Advanced Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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