Correlation Between Innowireless and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Innowireless and Korea Alcohol 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 Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and Korea Alcohol Industrial, you can compare the effects of market volatilities on Innowireless and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and Korea Alcohol.
Diversification Opportunities for Innowireless and Korea Alcohol
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innowireless and Korea is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Innowireless i.e., Innowireless and Korea Alcohol go up and down completely randomly.
Pair Corralation between Innowireless and Korea Alcohol
Assuming the 90 days trading horizon Innowireless Co is expected to generate 1.4 times more return on investment than Korea Alcohol. However, Innowireless is 1.4 times more volatile than Korea Alcohol Industrial. It trades about 0.15 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.29 per unit of risk. If you would invest 1,788,000 in Innowireless Co on September 12, 2024 and sell it today you would earn a total of 162,000 from holding Innowireless Co or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innowireless Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Innowireless |
| Korea Alcohol Industrial |
Innowireless and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and Korea Alcohol
The main advantage of trading using opposite Innowireless and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Innowireless vs. Samsung Electronics Co | Innowireless vs. Samsung Electronics Co | Innowireless vs. SK Hynix | Innowireless vs. POSCO Holdings |
| Korea Alcohol vs. Innowireless Co | Korea Alcohol vs. Wireless Power Amplifier | Korea Alcohol vs. Sangsangin Investment Securities | Korea Alcohol vs. Nable Communications |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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