Correlation Between Solution Advanced and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Sangsin Energy 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 Sangsin Energy 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 Sangsin Energy Display, you can compare the effects of market volatilities on Solution Advanced and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Sangsin Energy.
Diversification Opportunities for Solution Advanced and Sangsin Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Sangsin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Solution Advanced i.e., Solution Advanced and Sangsin Energy go up and down completely randomly.
Pair Corralation between Solution Advanced and Sangsin Energy
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 1.14 times more return on investment than Sangsin Energy. However, Solution Advanced is 1.14 times more volatile than Sangsin Energy Display. It trades about -0.02 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.03 per unit of risk. If you would invest 282,360 in Solution Advanced Technology on September 13, 2024 and sell it today you would lose (137,360) from holding Solution Advanced Technology or give up 48.65% 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. Sangsin Energy Display
Performance |
| Timeline |
| Solution Advanced |
| Sangsin Energy Display |
Solution Advanced and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Sangsin Energy
The main advantage of trading using opposite Solution Advanced and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy'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 |
| Sangsin Energy vs. Korea New Network | Sangsin Energy vs. Solution Advanced Technology | Sangsin Energy vs. Busan Industrial Co | Sangsin Energy 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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