Correlation Between Alton Sports and Insung Information
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Insung 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 Alton Sports and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Insung Information Co, you can compare the effects of market volatilities on Alton Sports and Insung 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 Alton Sports with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Insung Information.
Diversification Opportunities for Alton Sports and Insung Information
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alton and Insung is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Alton Sports i.e., Alton Sports and Insung Information go up and down completely randomly.
Pair Corralation between Alton Sports and Insung Information
Assuming the 90 days trading horizon Alton Sports is expected to generate 1.45 times less return on investment than Insung Information. But when comparing it to its historical volatility, Alton Sports CoLtd is 2.66 times less risky than Insung Information. It trades about 0.24 of its potential returns per unit of risk. Insung Information Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 178,700 in Insung Information Co on October 29, 2024 and sell it today you would earn a total of 9,600 from holding Insung Information Co or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Insung Information Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| Insung Information |
Alton Sports and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Insung Information
The main advantage of trading using opposite Alton Sports and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Insung 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 Insung Information will offset losses from the drop in Insung Information's long position.| Alton Sports vs. Samsung Electronics Co | Alton Sports vs. Samsung Electronics Co | Alton Sports vs. KB Financial Group | Alton Sports vs. Shinhan Financial Group |
| Insung Information vs. Namhae Chemical | Insung Information vs. N2Tech Co | Insung Information vs. Wireless Power Amplifier | Insung Information vs. iNtRON Biotechnology |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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