Correlation Between Innowireless and Hite Jinro
Can any of the company-specific risk be diversified away by investing in both Innowireless and Hite Jinro 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 Innowireless and Hite Jinro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and Hite Jinro, you can compare the effects of market volatilities on Innowireless and Hite Jinro 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 Innowireless with a short position of Hite Jinro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and Hite Jinro.
Diversification Opportunities for Innowireless and Hite Jinro
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innowireless and Hite is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and Hite Jinro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hite Jinro and Innowireless 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 Innowireless Co are associated (or correlated) with Hite Jinro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hite Jinro has no effect on the direction of Innowireless i.e., Innowireless and Hite Jinro go up and down completely randomly.
Pair Corralation between Innowireless and Hite Jinro
Assuming the 90 days trading horizon Innowireless Co is expected to under-perform the Hite Jinro. In addition to that, Innowireless is 1.39 times more volatile than Hite Jinro. It trades about -0.04 of its total potential returns per unit of risk. Hite Jinro is currently generating about -0.01 per unit of volatility. If you would invest 2,435,998 in Hite Jinro on September 3, 2024 and sell it today you would lose (365,998) from holding Hite Jinro or give up 15.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.04% |
| Values | Daily Returns |
Innowireless Co vs. Hite Jinro
Performance |
| Timeline |
| Innowireless |
| Hite Jinro |
Innowireless and Hite Jinro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and Hite Jinro
The main advantage of trading using opposite Innowireless and Hite Jinro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, Hite Jinro 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 Hite Jinro will offset losses from the drop in Hite Jinro's long position.| Innowireless vs. Korea Computer | Innowireless vs. Lotte Data Communication | Innowireless vs. Samsung Publishing Co | Innowireless vs. Neungyule Education |
| Hite Jinro vs. Dongil Steel Co | Hite Jinro vs. Innowireless Co | Hite Jinro vs. Lotte Data Communication | Hite Jinro vs. Hanil Iron Steel |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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