Correlation Between SNTEnergy and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both SNTEnergy 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 SNTEnergy and InnoTherapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNTEnergy Co and InnoTherapy, you can compare the effects of market volatilities on SNTEnergy 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 SNTEnergy with a short position of InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNTEnergy and InnoTherapy.
Diversification Opportunities for SNTEnergy and InnoTherapy
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SNTEnergy and InnoTherapy is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SNTEnergy Co and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy and SNTEnergy 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 SNTEnergy Co 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 SNTEnergy i.e., SNTEnergy and InnoTherapy go up and down completely randomly.
Pair Corralation between SNTEnergy and InnoTherapy
Assuming the 90 days trading horizon SNTEnergy Co is expected to generate 1.49 times more return on investment than InnoTherapy. However, SNTEnergy is 1.49 times more volatile than InnoTherapy. It trades about 0.07 of its potential returns per unit of risk. InnoTherapy is currently generating about 0.01 per unit of risk. If you would invest 626,591 in SNTEnergy Co on September 3, 2024 and sell it today you would earn a total of 1,063,409 from holding SNTEnergy Co or generate 169.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNTEnergy Co vs. InnoTherapy
Performance |
| Timeline |
| SNTEnergy |
| InnoTherapy |
SNTEnergy and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNTEnergy and InnoTherapy
The main advantage of trading using opposite SNTEnergy and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNTEnergy 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.| SNTEnergy vs. Daejoo Electronic Materials | SNTEnergy vs. Dongbu Insurance Co | SNTEnergy vs. Korean Reinsurance Co | SNTEnergy vs. UJU Electronics Co |
| InnoTherapy vs. Kolon Life Science | InnoTherapy vs. JETEMA Co | InnoTherapy vs. Aminologics CoLtd | InnoTherapy vs. Daihan Pharmaceutical CoLtd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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