Correlation Between Innowireless and Samsung Fire
Can any of the company-specific risk be diversified away by investing in both Innowireless and Samsung Fire 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 Samsung Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and Samsung Fire Marine, you can compare the effects of market volatilities on Innowireless and Samsung Fire 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 Samsung Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and Samsung Fire.
Diversification Opportunities for Innowireless and Samsung Fire
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Innowireless and Samsung is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and Samsung Fire Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Fire Marine 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 Samsung Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Fire Marine has no effect on the direction of Innowireless i.e., Innowireless and Samsung Fire go up and down completely randomly.
Pair Corralation between Innowireless and Samsung Fire
Assuming the 90 days trading horizon Innowireless Co is expected to generate 0.6 times more return on investment than Samsung Fire. However, Innowireless Co is 1.68 times less risky than Samsung Fire. It trades about 0.23 of its potential returns per unit of risk. Samsung Fire Marine is currently generating about 0.04 per unit of risk. If you would invest 2,120,000 in Innowireless Co on November 7, 2024 and sell it today you would earn a total of 160,000 from holding Innowireless Co or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Innowireless Co vs. Samsung Fire Marine
Performance |
| Timeline |
| Innowireless |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Samsung Fire Marine |
Innowireless and Samsung Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and Samsung Fire
The main advantage of trading using opposite Innowireless and Samsung Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, Samsung Fire 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 Samsung Fire will offset losses from the drop in Samsung Fire's long position.| Innowireless vs. Genie Music | Innowireless vs. Wonbang Tech Co | Innowireless vs. Vitzro Tech Co | Innowireless vs. Jeju Bank |
| Samsung Fire vs. Shinhan Financial Group | Samsung Fire vs. Hana Financial | Samsung Fire vs. Samsung Electronics Co | Samsung Fire vs. Samsung Electronics 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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