Correlation Between Solution Advanced and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Hanwha Life 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 Hanwha Life 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 Hanwha Life Insurance, you can compare the effects of market volatilities on Solution Advanced and Hanwha Life 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 Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Hanwha Life.
Diversification Opportunities for Solution Advanced and Hanwha Life
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Solution and Hanwha is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Solution Advanced i.e., Solution Advanced and Hanwha Life go up and down completely randomly.
Pair Corralation between Solution Advanced and Hanwha Life
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 18.54 times more return on investment than Hanwha Life. However, Solution Advanced is 18.54 times more volatile than Hanwha Life Insurance. It trades about 0.44 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about -0.04 per unit of risk. If you would invest 132,600 in Solution Advanced Technology on November 7, 2024 and sell it today you would earn a total of 140,400 from holding Solution Advanced Technology or generate 105.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Solution Advanced Technology vs. Hanwha Life Insurance
Performance |
| Timeline |
| Solution Advanced |
| Hanwha Life Insurance |
Solution Advanced and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Hanwha Life
The main advantage of trading using opposite Solution Advanced and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Hanwha Life 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 Hanwha Life will offset losses from the drop in Hanwha Life's long position.| Solution Advanced vs. Samsung Life Insurance | Solution Advanced vs. Pan Entertainment Co | Solution Advanced vs. Mobileleader CoLtd | Solution Advanced vs. SK Chemicals Co |
| Hanwha Life vs. AptaBio Therapeutics | Hanwha Life vs. Daewoo SBI SPAC | Hanwha Life vs. Dream Security co | Hanwha Life vs. Microfriend |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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