Correlation Between Innowireless and Korea Information
Can any of the company-specific risk be diversified away by investing in both Innowireless and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on Innowireless and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and Korea Information.
Diversification Opportunities for Innowireless and Korea Information
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innowireless and Korea is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Innowireless i.e., Innowireless and Korea Information go up and down completely randomly.
Pair Corralation between Innowireless and Korea Information
Assuming the 90 days trading horizon Innowireless Co is expected to generate 2.07 times more return on investment than Korea Information. However, Innowireless is 2.07 times more volatile than Korea Information Communications. It trades about 0.18 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.15 per unit of risk. If you would invest 2,000,000 in Innowireless Co on October 24, 2024 and sell it today you would earn a total of 130,000 from holding Innowireless Co or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innowireless Co vs. Korea Information Communicatio
Performance |
| Timeline |
| Innowireless |
| Korea Information |
Innowireless and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and Korea Information
The main advantage of trading using opposite Innowireless and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| Innowireless vs. RF Materials Co | Innowireless vs. Ssangyong Materials Corp | Innowireless vs. Kolon Plastics | Innowireless vs. DB Financial Investment |
| Korea Information vs. Dongbang Transport Logistics | Korea Information vs. EV Advanced Material | Korea Information vs. Daejoo Electronic Materials | Korea Information vs. Seoyon Topmetal 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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