Correlation Between Inzi Display and Korean Drug
Can any of the company-specific risk be diversified away by investing in both Inzi Display and Korean Drug 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 Inzi Display and Korean Drug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inzi Display CoLtd and Korean Drug Co, you can compare the effects of market volatilities on Inzi Display and Korean Drug 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 Inzi Display with a short position of Korean Drug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inzi Display and Korean Drug.
Diversification Opportunities for Inzi Display and Korean Drug
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inzi and Korean is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Inzi Display CoLtd and Korean Drug Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Drug and Inzi Display 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 Inzi Display CoLtd are associated (or correlated) with Korean Drug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Drug has no effect on the direction of Inzi Display i.e., Inzi Display and Korean Drug go up and down completely randomly.
Pair Corralation between Inzi Display and Korean Drug
Assuming the 90 days trading horizon Inzi Display CoLtd is expected to under-perform the Korean Drug. In addition to that, Inzi Display is 1.07 times more volatile than Korean Drug Co. It trades about -0.35 of its total potential returns per unit of risk. Korean Drug Co is currently generating about -0.2 per unit of volatility. If you would invest 488,000 in Korean Drug Co on August 29, 2024 and sell it today you would lose (27,500) from holding Korean Drug Co or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inzi Display CoLtd vs. Korean Drug Co
Performance |
| Timeline |
| Inzi Display CoLtd |
| Korean Drug |
Inzi Display and Korean Drug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inzi Display and Korean Drug
The main advantage of trading using opposite Inzi Display and Korean Drug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inzi Display position performs unexpectedly, Korean Drug 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 Korean Drug will offset losses from the drop in Korean Drug's long position.| Inzi Display vs. Daou Data Corp | Inzi Display vs. Busan Industrial Co | Inzi Display vs. Busan Ind | Inzi Display vs. Shinhan WTI Futures |
| Korean Drug vs. AnterogenCoLtd | Korean Drug vs. Busan Industrial Co | Korean Drug vs. Busan Ind | Korean Drug vs. Shinhan WTI Futures |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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