Correlation Between Solution Advanced and Cosmax Nbt
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Cosmax Nbt 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 Cosmax Nbt 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 Cosmax Nbt, you can compare the effects of market volatilities on Solution Advanced and Cosmax Nbt 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 Cosmax Nbt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Cosmax Nbt.
Diversification Opportunities for Solution Advanced and Cosmax Nbt
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solution and Cosmax is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Cosmax Nbt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmax Nbt 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 Cosmax Nbt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmax Nbt has no effect on the direction of Solution Advanced i.e., Solution Advanced and Cosmax Nbt go up and down completely randomly.
Pair Corralation between Solution Advanced and Cosmax Nbt
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Cosmax Nbt. But the stock apears to be less risky and, when comparing its historical volatility, Solution Advanced Technology is 1.03 times less risky than Cosmax Nbt. The stock trades about -0.07 of its potential returns per unit of risk. The Cosmax Nbt is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 555,000 in Cosmax Nbt on September 12, 2024 and sell it today you would lose (250,000) from holding Cosmax Nbt or give up 45.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Cosmax Nbt
Performance |
| Timeline |
| Solution Advanced |
| Cosmax Nbt |
Solution Advanced and Cosmax Nbt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Cosmax Nbt
The main advantage of trading using opposite Solution Advanced and Cosmax Nbt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Cosmax Nbt 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 Cosmax Nbt will offset losses from the drop in Cosmax Nbt'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 |
| Cosmax Nbt vs. Korea New Network | Cosmax Nbt vs. ICD Co | Cosmax Nbt vs. DYPNF CoLtd | Cosmax Nbt 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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