Correlation Between Innowireless and Hotel Shilla
Can any of the company-specific risk be diversified away by investing in both Innowireless and Hotel Shilla 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 Hotel Shilla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and Hotel Shilla Co, you can compare the effects of market volatilities on Innowireless and Hotel Shilla 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 Hotel Shilla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and Hotel Shilla.
Diversification Opportunities for Innowireless and Hotel Shilla
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innowireless and Hotel is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and Hotel Shilla Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Shilla 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 Hotel Shilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Shilla has no effect on the direction of Innowireless i.e., Innowireless and Hotel Shilla go up and down completely randomly.
Pair Corralation between Innowireless and Hotel Shilla
Assuming the 90 days trading horizon Innowireless Co is expected to generate 3.47 times more return on investment than Hotel Shilla. However, Innowireless is 3.47 times more volatile than Hotel Shilla Co. It trades about 0.23 of its potential returns per unit of risk. Hotel Shilla Co is currently generating about -0.42 per unit of risk. If you would invest 2,120,000 in Innowireless Co on November 5, 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innowireless Co vs. Hotel Shilla Co
Performance |
| Timeline |
| Innowireless |
| Hotel Shilla |
Innowireless and Hotel Shilla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and Hotel Shilla
The main advantage of trading using opposite Innowireless and Hotel Shilla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, Hotel Shilla 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 Hotel Shilla will offset losses from the drop in Hotel Shilla's long position.| Innowireless vs. Daelim Trading Co | Innowireless vs. LG Chemicals | Innowireless vs. SK Chemicals Co | Innowireless vs. Golden Bridge Investment |
| Hotel Shilla vs. EBEST Investment Securities | Hotel Shilla vs. SBI Investment KOREA | Hotel Shilla vs. DB Financial Investment | Hotel Shilla vs. LB Investment |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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