Correlation Between 475050 and Solution Advanced

Can any of the company-specific risk be diversified away by investing in both 475050 and Solution Advanced 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 475050 and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 475050 and Solution Advanced Technology, you can compare the effects of market volatilities on 475050 and Solution Advanced 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 475050 with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of 475050 and Solution Advanced.

Diversification Opportunities for 475050 and Solution Advanced

-0.49

Correlation Coefficient

475050  Solution Advanced

Very good diversification

The 3 months correlation between 475050 and Solution is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding 475050 and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced and 475050 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 475050 are associated (or correlated) with Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of 475050 i.e., 475050 and Solution Advanced go up and down completely randomly.

Pair Corralation between 475050 and Solution Advanced

Assuming the 90 days trading horizon 475050 is expected to generate 0.66 times more return on investment than Solution Advanced. However, 475050 is 1.51 times less risky than Solution Advanced. It trades about 0.02 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about -0.04 per unit of risk. If you would invest  846,500  in 475050 on October 21, 2024 and sell it today you would earn a total of  38,500  from holding 475050 or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	48.97%
Values	Daily Returns

475050  vs.  Solution Advanced Technology

475050

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 475050 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 475050 sustained solid returns over the last few months and may actually be approaching a breakup point.

Solution Advanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solution Advanced Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with 475050 and Solution Advanced

The main advantage of trading using opposite 475050 and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 475050 position performs unexpectedly, Solution Advanced 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 Solution Advanced will offset losses from the drop in Solution Advanced's long position.

The idea behind 475050 and Solution Advanced Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.