Correlation Between Innowireless and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Innowireless and Wireless Power 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 Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innowireless Co and Wireless Power Amplifier, you can compare the effects of market volatilities on Innowireless and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and Wireless Power.
Diversification Opportunities for Innowireless and Wireless Power
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innowireless and Wireless is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Innowireless i.e., Innowireless and Wireless Power go up and down completely randomly.
Pair Corralation between Innowireless and Wireless Power
Assuming the 90 days trading horizon Innowireless Co is expected to under-perform the Wireless Power. But the stock apears to be less risky and, when comparing its historical volatility, Innowireless Co is 1.48 times less risky than Wireless Power. The stock trades about -0.04 of its potential returns per unit of risk. The Wireless Power Amplifier is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 309,500 in Wireless Power Amplifier on September 12, 2024 and sell it today you would lose (90,000) from holding Wireless Power Amplifier or give up 29.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.83% |
| Values | Daily Returns |
Innowireless Co vs. Wireless Power Amplifier
Performance |
| Timeline |
| Innowireless |
| Wireless Power Amplifier |
Innowireless and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innowireless and Wireless Power
The main advantage of trading using opposite Innowireless and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innowireless position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| Innowireless vs. Samsung Electronics Co | Innowireless vs. Samsung Electronics Co | Innowireless vs. SK Hynix | Innowireless vs. POSCO Holdings |
| Wireless Power vs. SK Chemicals Co | Wireless Power vs. Wave Electronics Co | Wireless Power vs. Cuckoo Electronics Co | Wireless Power vs. Sung Bo Chemicals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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