Correlation Between Sang A and Innowireless
Can any of the company-specific risk be diversified away by investing in both Sang A and Innowireless 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 Sang A and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sang A Frontec CoLtd and Innowireless Co, you can compare the effects of market volatilities on Sang A and Innowireless 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 Sang A with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sang A and Innowireless.
Diversification Opportunities for Sang A and Innowireless
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sang and Innowireless is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sang A Frontec CoLtd and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and Sang A 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 Sang A Frontec CoLtd are associated (or correlated) with Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Sang A i.e., Sang A and Innowireless go up and down completely randomly.
Pair Corralation between Sang A and Innowireless
Assuming the 90 days trading horizon Sang A Frontec CoLtd is expected to generate 1.18 times more return on investment than Innowireless. However, Sang A is 1.18 times more volatile than Innowireless Co. It trades about -0.03 of its potential returns per unit of risk. Innowireless Co is currently generating about -0.03 per unit of risk. If you would invest 3,036,620 in Sang A Frontec CoLtd on October 13, 2024 and sell it today you would lose (1,167,620) from holding Sang A Frontec CoLtd or give up 38.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.83% |
| Values | Daily Returns |
Sang A Frontec CoLtd vs. Innowireless Co
Performance |
| Timeline |
| Sang A Frontec |
| Innowireless |
Sang A and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sang A and Innowireless
The main advantage of trading using opposite Sang A and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sang A position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Sang A vs. MediaZen | Sang A vs. Pan Entertainment Co | Sang A vs. SAMG Entertainment Co | Sang A vs. Lotte Data Communication |
| Innowireless vs. Samyung Trading Co | Innowireless vs. Daol Investment Securities | Innowireless vs. Nable Communications | Innowireless vs. Digital Power 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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