Correlation Between Ecoplastic and INNOX Advanced
Can any of the company-specific risk be diversified away by investing in both Ecoplastic and INNOX Advanced 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 Ecoplastic and INNOX Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecoplastic and INNOX Advanced Materials, you can compare the effects of market volatilities on Ecoplastic and INNOX Advanced 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 Ecoplastic with a short position of INNOX Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecoplastic and INNOX Advanced.
Diversification Opportunities for Ecoplastic and INNOX Advanced
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ecoplastic and INNOX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ecoplastic and INNOX Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOX Advanced Materials and Ecoplastic 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 Ecoplastic are associated (or correlated) with INNOX Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOX Advanced Materials has no effect on the direction of Ecoplastic i.e., Ecoplastic and INNOX Advanced go up and down completely randomly.
Pair Corralation between Ecoplastic and INNOX Advanced
Assuming the 90 days trading horizon Ecoplastic is expected to under-perform the INNOX Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Ecoplastic is 1.25 times less risky than INNOX Advanced. The stock trades about -0.24 of its potential returns per unit of risk. The INNOX Advanced Materials is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 2,355,000 in INNOX Advanced Materials on August 28, 2024 and sell it today you would lose (165,000) from holding INNOX Advanced Materials or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecoplastic vs. INNOX Advanced Materials
Performance |
| Timeline |
| Ecoplastic |
| INNOX Advanced Materials |
Ecoplastic and INNOX Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecoplastic and INNOX Advanced
The main advantage of trading using opposite Ecoplastic and INNOX Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecoplastic position performs unexpectedly, INNOX Advanced 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 INNOX Advanced will offset losses from the drop in INNOX Advanced's long position.| Ecoplastic vs. Busan Industrial Co | Ecoplastic vs. Busan Ind | Ecoplastic vs. Mirae Asset Daewoo | Ecoplastic vs. UNISEM Co |
| INNOX Advanced vs. Dongsin Engineering Construction | INNOX Advanced vs. QUALITAS SEMICONDUCTOR LTD | INNOX Advanced vs. Seoul Semiconductor Co | INNOX Advanced vs. Jeju Semiconductor Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |