Correlation Between Anam Electronics and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both Anam Electronics and InnoTherapy 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 Anam Electronics and InnoTherapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anam Electronics Co and InnoTherapy, you can compare the effects of market volatilities on Anam Electronics and InnoTherapy 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 Anam Electronics with a short position of InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anam Electronics and InnoTherapy.
Diversification Opportunities for Anam Electronics and InnoTherapy
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anam and InnoTherapy is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Anam Electronics Co and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy and Anam Electronics 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 Anam Electronics Co are associated (or correlated) with InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of Anam Electronics i.e., Anam Electronics and InnoTherapy go up and down completely randomly.
Pair Corralation between Anam Electronics and InnoTherapy
Assuming the 90 days trading horizon Anam Electronics Co is expected to under-perform the InnoTherapy. But the stock apears to be less risky and, when comparing its historical volatility, Anam Electronics Co is 1.77 times less risky than InnoTherapy. The stock trades about -0.56 of its potential returns per unit of risk. The InnoTherapy is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 827,000 in InnoTherapy on November 5, 2024 and sell it today you would earn a total of 175,000 from holding InnoTherapy or generate 21.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anam Electronics Co vs. InnoTherapy
Performance |
| Timeline |
| Anam Electronics |
| InnoTherapy |
Anam Electronics and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anam Electronics and InnoTherapy
The main advantage of trading using opposite Anam Electronics and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anam Electronics position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy's long position.| Anam Electronics vs. Daejoo Electronic Materials | Anam Electronics vs. System and Application | Anam Electronics vs. Insung Information Co | Anam Electronics vs. ABCO Electronics Co |
| InnoTherapy vs. Iljin Display | InnoTherapy vs. Nice Information Telecommunication | InnoTherapy vs. Korea Computer | InnoTherapy vs. AeroSpace Technology of |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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