Correlation Between Spolytech and Innometry
Can any of the company-specific risk be diversified away by investing in both Spolytech and Innometry 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 Spolytech and Innometry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spolytech Co and Innometry Co, you can compare the effects of market volatilities on Spolytech and Innometry 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 Spolytech with a short position of Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spolytech and Innometry.
Diversification Opportunities for Spolytech and Innometry
Very weak diversification
The 3 months correlation between Spolytech and Innometry is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Spolytech Co and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry and Spolytech 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 Spolytech Co are associated (or correlated) with Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of Spolytech i.e., Spolytech and Innometry go up and down completely randomly.
Pair Corralation between Spolytech and Innometry
Assuming the 90 days trading horizon Spolytech Co is expected to generate 0.77 times more return on investment than Innometry. However, Spolytech Co is 1.29 times less risky than Innometry. It trades about -0.04 of its potential returns per unit of risk. Innometry Co is currently generating about -0.03 per unit of risk. If you would invest 260,000 in Spolytech Co on November 2, 2024 and sell it today you would lose (108,300) from holding Spolytech Co or give up 41.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spolytech Co vs. Innometry Co
Performance |
| Timeline |
| Spolytech |
| Innometry |
Spolytech and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spolytech and Innometry
The main advantage of trading using opposite Spolytech and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spolytech position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| Spolytech vs. Samyoung Electronics Co | Spolytech vs. Worldex Industry Trading | Spolytech vs. Daejoo Electronic Materials | Spolytech vs. PJ Electronics Co |
| Innometry vs. GS Engineering Construction | Innometry vs. Digital Power Communications | Innometry vs. Hyundai Engineering Construction | Innometry vs. KEPCO Engineering Construction |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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