Correlation Between Choil Aluminum and Intellian Technologies
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and Intellian Technologies 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 Choil Aluminum and Intellian Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and Intellian Technologies, you can compare the effects of market volatilities on Choil Aluminum and Intellian Technologies 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 Choil Aluminum with a short position of Intellian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Intellian Technologies.
Diversification Opportunities for Choil Aluminum and Intellian Technologies
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choil and Intellian is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Intellian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellian Technologies and Choil Aluminum 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 Choil Aluminum are associated (or correlated) with Intellian Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellian Technologies has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and Intellian Technologies go up and down completely randomly.
Pair Corralation between Choil Aluminum and Intellian Technologies
Assuming the 90 days trading horizon Choil Aluminum is expected to generate 0.73 times more return on investment than Intellian Technologies. However, Choil Aluminum is 1.37 times less risky than Intellian Technologies. It trades about -0.13 of its potential returns per unit of risk. Intellian Technologies is currently generating about -0.11 per unit of risk. If you would invest 232,500 in Choil Aluminum on August 25, 2024 and sell it today you would lose (81,900) from holding Choil Aluminum or give up 35.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Intellian Technologies
Performance |
| Timeline |
| Choil Aluminum |
| Intellian Technologies |
Choil Aluminum and Intellian Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Intellian Technologies
The main advantage of trading using opposite Choil Aluminum and Intellian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, Intellian Technologies 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 Intellian Technologies will offset losses from the drop in Intellian Technologies' long position.| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. Busan Ind | Choil Aluminum vs. Mirae Asset Daewoo | Choil Aluminum vs. UNISEM Co |
| Intellian Technologies vs. KakaoBank Corp | Intellian Technologies vs. Dgb Financial | Intellian Technologies vs. Choil Aluminum | Intellian Technologies vs. GS Retail Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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