Correlation Between Kolon Plastics and Innowireless
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Innowireless Co, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Innowireless.
Diversification Opportunities for Kolon Plastics and Innowireless
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kolon and Innowireless is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics i.e., Kolon Plastics and Innowireless go up and down completely randomly.
Pair Corralation between Kolon Plastics and Innowireless
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 15.41 times less return on investment than Innowireless. But when comparing it to its historical volatility, Kolon Plastics is 1.26 times less risky than Innowireless. It trades about 0.02 of its potential returns per unit of risk. Innowireless Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,095,000 in Innowireless Co on November 3, 2024 and sell it today you would earn a total of 185,000 from holding Innowireless Co or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Innowireless Co
Performance |
| Timeline |
| Kolon Plastics |
| Innowireless |
Kolon Plastics and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Innowireless
The main advantage of trading using opposite Kolon Plastics and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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.| Kolon Plastics vs. Camus Engineering Construction | Kolon Plastics vs. Seoam Machinery Industry | Kolon Plastics vs. Seohee Construction Co | Kolon Plastics vs. Woori Financial Group |
| Innowireless vs. Husteel | Innowireless vs. TS Investment Corp | Innowireless vs. Nature and Environment | Innowireless vs. Samhyun Steel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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