Correlation Between Puloon Technology and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both Puloon Technology and InnoTherapy 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 Puloon Technology and InnoTherapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puloon Technology and InnoTherapy, you can compare the effects of market volatilities on Puloon Technology and InnoTherapy 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 Puloon Technology with a short position of InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puloon Technology and InnoTherapy.
Diversification Opportunities for Puloon Technology and InnoTherapy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Puloon and InnoTherapy is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Puloon Technology and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy and Puloon Technology 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 Puloon Technology are associated (or correlated) with InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of Puloon Technology i.e., Puloon Technology and InnoTherapy go up and down completely randomly.
Pair Corralation between Puloon Technology and InnoTherapy
Assuming the 90 days trading horizon Puloon Technology is expected to generate 15.82 times less return on investment than InnoTherapy. But when comparing it to its historical volatility, Puloon Technology is 1.31 times less risky than InnoTherapy. It trades about 0.04 of its potential returns per unit of risk. InnoTherapy is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 827,000 in InnoTherapy on November 7, 2024 and sell it today you would earn a total of 199,000 from holding InnoTherapy or generate 24.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puloon Technology vs. InnoTherapy
Performance |
| Timeline |
| Puloon Technology |
| InnoTherapy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Puloon Technology and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puloon Technology and InnoTherapy
The main advantage of trading using opposite Puloon Technology and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puloon Technology position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy's long position.| Puloon Technology vs. Ssangyong Materials Corp | Puloon Technology vs. SK IE Technology | Puloon Technology vs. Asia Technology Co | Puloon Technology vs. Woori Technology |
| InnoTherapy vs. Neungyule Education | InnoTherapy vs. Daehan Synthetic Fiber | InnoTherapy vs. Hotel Shilla Co | InnoTherapy vs. Hansol Chemical 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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