Correlation Between INtRON Biotechnology and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology and ABOV Semiconductor 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 INtRON Biotechnology and ABOV Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and ABOV Semiconductor Co, you can compare the effects of market volatilities on INtRON Biotechnology and ABOV Semiconductor 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 INtRON Biotechnology with a short position of ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and ABOV Semiconductor.
Diversification Opportunities for INtRON Biotechnology and ABOV Semiconductor
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INtRON and ABOV is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and ABOV Semiconductor
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 0.77 times more return on investment than ABOV Semiconductor. However, iNtRON Biotechnology is 1.3 times less risky than ABOV Semiconductor. It trades about -0.07 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about -0.25 per unit of risk. If you would invest 585,000 in iNtRON Biotechnology on August 29, 2024 and sell it today you would lose (22,000) from holding iNtRON Biotechnology or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iNtRON Biotechnology vs. ABOV Semiconductor Co
Performance |
| Timeline |
| iNtRON Biotechnology |
| ABOV Semiconductor |
INtRON Biotechnology and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and ABOV Semiconductor
The main advantage of trading using opposite INtRON Biotechnology and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| INtRON Biotechnology vs. Medy Tox | INtRON Biotechnology vs. Busan Industrial Co | INtRON Biotechnology vs. Busan Ind | INtRON Biotechnology vs. Mirae Asset Daewoo |
| ABOV Semiconductor vs. Korea Real Estate | ABOV Semiconductor vs. Korea Ratings Co | ABOV Semiconductor vs. IQuest Co | ABOV Semiconductor vs. Wonbang Tech 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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