Correlation Between Solution Advanced and Shin Heung
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Shin Heung 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 Shin Heung 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 Shin Heung Energy, you can compare the effects of market volatilities on Solution Advanced and Shin Heung 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 Shin Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Shin Heung.
Diversification Opportunities for Solution Advanced and Shin Heung
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Shin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy 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 Shin Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of Solution Advanced i.e., Solution Advanced and Shin Heung go up and down completely randomly.
Pair Corralation between Solution Advanced and Shin Heung
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Shin Heung. In addition to that, Solution Advanced is 1.13 times more volatile than Shin Heung Energy. It trades about -0.16 of its total potential returns per unit of risk. Shin Heung Energy is currently generating about -0.09 per unit of volatility. If you would invest 513,000 in Shin Heung Energy on October 21, 2024 and sell it today you would lose (19,500) from holding Shin Heung Energy or give up 3.8% 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. Shin Heung Energy
Performance |
| Timeline |
| Solution Advanced |
| Shin Heung Energy |
Solution Advanced and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Shin Heung
The main advantage of trading using opposite Solution Advanced and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Shin Heung 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 Shin Heung will offset losses from the drop in Shin Heung's long position.| Solution Advanced vs. SEOWONINTECHCoLtd | Solution Advanced vs. Moonbae Steel | Solution Advanced vs. Vitzro Tech Co | Solution Advanced vs. Seah Steel Corp |
| Shin Heung vs. KT Submarine Telecom | Shin Heung vs. Homecast CoLtd | Shin Heung vs. Taegu Broadcasting | Shin Heung vs. Dongbang Transport Logistics |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stocks Directory Find actively traded stocks across global markets |