Correlation Between Innowireless and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Innowireless and KyungIn Electronics 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 KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and KyungIn Electronics Co, you can compare the effects of market volatilities on Innowireless and KyungIn Electronics 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 KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and KyungIn Electronics.
Diversification Opportunities for Innowireless and KyungIn Electronics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innowireless and KyungIn is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics 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 KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Innowireless i.e., Innowireless and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Innowireless and KyungIn Electronics
Assuming the 90 days trading horizon Innowireless Co is expected to generate 2.06 times more return on investment than KyungIn Electronics. However, Innowireless is 2.06 times more volatile than KyungIn Electronics Co. It trades about 0.12 of its potential returns per unit of risk. KyungIn Electronics Co is currently generating about 0.02 per unit of risk. If you would invest 1,709,000 in Innowireless Co on August 27, 2024 and sell it today you would earn a total of 89,000 from holding Innowireless Co or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innowireless Co vs. KyungIn Electronics Co
Performance |
| Timeline |
| Innowireless |
| KyungIn Electronics |
Innowireless and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and KyungIn Electronics
The main advantage of trading using opposite Innowireless and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, KyungIn Electronics 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.| Innowireless vs. AptaBio Therapeutics | Innowireless vs. Daewoo SBI SPAC | Innowireless vs. Dream Security co | Innowireless vs. Microfriend |
| KyungIn Electronics vs. AptaBio Therapeutics | KyungIn Electronics vs. Daewoo SBI SPAC | KyungIn Electronics vs. Dream Security co | KyungIn Electronics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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