Correlation Between COWAY and Incar Financial
Can any of the company-specific risk be diversified away by investing in both COWAY and Incar Financial 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 COWAY and Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COWAY Co and Incar Financial Service, you can compare the effects of market volatilities on COWAY and Incar Financial 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 COWAY with a short position of Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of COWAY and Incar Financial.
Diversification Opportunities for COWAY and Incar Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COWAY and Incar is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding COWAY Co and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service and COWAY 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 COWAY Co are associated (or correlated) with Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of COWAY i.e., COWAY and Incar Financial go up and down completely randomly.
Pair Corralation between COWAY and Incar Financial
Assuming the 90 days trading horizon COWAY Co is expected to generate 0.41 times more return on investment than Incar Financial. However, COWAY Co is 2.46 times less risky than Incar Financial. It trades about 0.05 of its potential returns per unit of risk. Incar Financial Service is currently generating about 0.01 per unit of risk. If you would invest 4,820,000 in COWAY Co on September 1, 2024 and sell it today you would earn a total of 1,770,000 from holding COWAY Co or generate 36.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.24% |
| Values | Daily Returns |
COWAY Co vs. Incar Financial Service
Performance |
| Timeline |
| COWAY |
| Incar Financial Service |
COWAY and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COWAY and Incar Financial
The main advantage of trading using opposite COWAY and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COWAY position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| COWAY vs. Inzi Display CoLtd | COWAY vs. Hyunwoo Industrial Co | COWAY vs. Songwon Industrial Co | COWAY vs. Sangsin Energy Display |
| Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Mirae Asset Daewoo | Incar Financial vs. Finebesteel |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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