Correlation Between Solution Advanced and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Duksan Hi 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 Duksan Hi 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 Duksan Hi Metal, you can compare the effects of market volatilities on Solution Advanced and Duksan Hi 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 Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Duksan Hi.
Diversification Opportunities for Solution Advanced and Duksan Hi
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Duksan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal 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 Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Solution Advanced i.e., Solution Advanced and Duksan Hi go up and down completely randomly.
Pair Corralation between Solution Advanced and Duksan Hi
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 1.09 times more return on investment than Duksan Hi. However, Solution Advanced is 1.09 times more volatile than Duksan Hi Metal. It trades about -0.03 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.14 per unit of risk. If you would invest 167,800 in Solution Advanced Technology on October 13, 2024 and sell it today you would lose (33,100) from holding Solution Advanced Technology or give up 19.73% 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. Duksan Hi Metal
Performance |
| Timeline |
| Solution Advanced |
| Duksan Hi Metal |
Solution Advanced and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Duksan Hi
The main advantage of trading using opposite Solution Advanced and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| Solution Advanced vs. InnoTherapy | Solution Advanced vs. Daou Technology | Solution Advanced vs. ENF Technology Co | Solution Advanced vs. Automobile Pc |
| Duksan Hi vs. Jeju Beer Co | Duksan Hi vs. Dong A Steel Technology | Duksan Hi vs. Display Tech Co | Duksan Hi 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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