Correlation Between Jinro Distillers and Innowireless
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers 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 Jinro Distillers and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinro Distillers Co and Innowireless Co, you can compare the effects of market volatilities on Jinro Distillers 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 Jinro Distillers with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Innowireless.
Diversification Opportunities for Jinro Distillers and Innowireless
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jinro and Innowireless is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and Jinro Distillers 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 Jinro Distillers Co 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 Jinro Distillers i.e., Jinro Distillers and Innowireless go up and down completely randomly.
Pair Corralation between Jinro Distillers and Innowireless
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.37 times more return on investment than Innowireless. However, Jinro Distillers Co is 2.68 times less risky than Innowireless. It trades about 0.05 of its potential returns per unit of risk. Innowireless Co is currently generating about -0.05 per unit of risk. If you would invest 1,551,056 in Jinro Distillers Co on September 3, 2024 and sell it today you would earn a total of 145,944 from holding Jinro Distillers Co or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.37% |
| Values | Daily Returns |
Jinro Distillers Co vs. Innowireless Co
Performance |
| Timeline |
| Jinro Distillers |
| Innowireless |
Jinro Distillers and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Innowireless
The main advantage of trading using opposite Jinro Distillers and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers 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.| Jinro Distillers vs. LG Display | Jinro Distillers vs. Hyundai Motor | Jinro Distillers vs. Hyundai Motor Co | Jinro Distillers vs. Hyundai Motor Co |
| Innowireless vs. Korea Computer | Innowireless vs. Lotte Data Communication | Innowireless vs. Samsung Publishing Co | Innowireless vs. Neungyule Education |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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