Correlation Between Solution Advanced and Air Busan
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Solution Advanced and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Air Busan.
Diversification Opportunities for Solution Advanced and Air Busan
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Solution and Air is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Solution Advanced i.e., Solution Advanced and Air Busan go up and down completely randomly.
Pair Corralation between Solution Advanced and Air Busan
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Air Busan. In addition to that, Solution Advanced is 1.24 times more volatile than Air Busan Co. It trades about -0.15 of its total potential returns per unit of risk. Air Busan Co is currently generating about 0.02 per unit of volatility. If you would invest 251,000 in Air Busan Co on August 28, 2024 and sell it today you would earn a total of 1,500 from holding Air Busan Co or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Air Busan Co
Performance |
| Timeline |
| Solution Advanced |
| Air Busan |
Solution Advanced and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Air Busan
The main advantage of trading using opposite Solution Advanced and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan'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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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