Correlation Between IC Technology and Innowireless
Can any of the company-specific risk be diversified away by investing in both IC Technology and Innowireless 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 IC Technology and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IC Technology Co and Innowireless Co, you can compare the effects of market volatilities on IC Technology and Innowireless 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 IC Technology with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of IC Technology and Innowireless.
Diversification Opportunities for IC Technology and Innowireless
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 052860 and Innowireless is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding IC Technology Co and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and IC Technology 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 IC Technology Co are associated (or correlated) with Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of IC Technology i.e., IC Technology and Innowireless go up and down completely randomly.
Pair Corralation between IC Technology and Innowireless
Assuming the 90 days trading horizon IC Technology Co is expected to under-perform the Innowireless. In addition to that, IC Technology is 1.48 times more volatile than Innowireless Co. It trades about -0.03 of its total potential returns per unit of risk. Innowireless Co is currently generating about -0.04 per unit of volatility. If you would invest 2,830,000 in Innowireless Co on August 31, 2024 and sell it today you would lose (932,000) from holding Innowireless Co or give up 32.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.29% |
| Values | Daily Returns |
IC Technology Co vs. Innowireless Co
Performance |
| Timeline |
| IC Technology |
| Innowireless |
IC Technology and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IC Technology and Innowireless
The main advantage of trading using opposite IC Technology and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IC Technology position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| IC Technology vs. Korean Drug Co | IC Technology vs. InfoBank | IC Technology vs. Echomarketing CoLtd | IC Technology vs. KakaoBank Corp |
| Innowireless vs. AptaBio Therapeutics | Innowireless vs. Daewoo SBI SPAC | Innowireless vs. Dream Security co | Innowireless vs. Microfriend |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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