Correlation Between Solution Advanced and Han Kook
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Han Kook 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 Han Kook 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 Han Kook Capital, you can compare the effects of market volatilities on Solution Advanced and Han Kook 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 Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Han Kook.
Diversification Opportunities for Solution Advanced and Han Kook
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solution and Han is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Han Kook Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Capital 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 Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Capital has no effect on the direction of Solution Advanced i.e., Solution Advanced and Han Kook go up and down completely randomly.
Pair Corralation between Solution Advanced and Han Kook
Assuming the 90 days trading horizon Solution Advanced Technology is expected to under-perform the Han Kook. In addition to that, Solution Advanced is 2.47 times more volatile than Han Kook Capital. It trades about -0.1 of its total potential returns per unit of risk. Han Kook Capital is currently generating about 0.2 per unit of volatility. If you would invest 51,865 in Han Kook Capital on October 6, 2024 and sell it today you would earn a total of 3,035 from holding Han Kook Capital or generate 5.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Solution Advanced Technology vs. Han Kook Capital
Performance |
Timeline |
Solution Advanced |
Han Kook Capital |
Solution Advanced and Han Kook Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Solution Advanced and Han Kook
The main advantage of trading using opposite Solution Advanced and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.Solution Advanced vs. DAEDUCK ELECTRONICS CoLtd | Solution Advanced vs. Sungmoon Electronics Co | Solution Advanced vs. Shinil Electronics Co | Solution Advanced vs. Daeduck Electronics Co |
Han Kook vs. Humasis Co | Han Kook vs. JUSUNG ENGINEERING Co | Han Kook vs. AfreecaTV Co | Han Kook vs. CJ ENM |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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