Correlation Between GS Engineering and Innowireless
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Innowireless 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 GS Engineering and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Innowireless Co, you can compare the effects of market volatilities on GS Engineering and Innowireless 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 GS Engineering with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Innowireless.
Diversification Opportunities for GS Engineering and Innowireless
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 006360 and Innowireless is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and GS Engineering 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 GS Engineering Construction are associated (or correlated) with Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of GS Engineering i.e., GS Engineering and Innowireless go up and down completely randomly.
Pair Corralation between GS Engineering and Innowireless
Assuming the 90 days trading horizon GS Engineering Construction is expected to under-perform the Innowireless. In addition to that, GS Engineering is 1.08 times more volatile than Innowireless Co. It trades about -0.1 of its total potential returns per unit of risk. Innowireless Co is currently generating about 0.23 per unit of volatility. If you would invest 2,120,000 in Innowireless Co on November 7, 2024 and sell it today you would earn a total of 160,000 from holding Innowireless Co or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Innowireless Co
Performance |
| Timeline |
| GS Engineering Const |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Innowireless |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
GS Engineering and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Innowireless
The main advantage of trading using opposite GS Engineering and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| GS Engineering vs. People Technology | GS Engineering vs. Vina Technology Co | GS Engineering vs. Hotel Shilla Co | GS Engineering vs. Samsung Publishing Co |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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