Correlation Between KG Eco and Innowireless
Can any of the company-specific risk be diversified away by investing in both KG Eco 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 KG Eco and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KG Eco Technology and Innowireless Co, you can compare the effects of market volatilities on KG Eco 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 KG Eco with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Innowireless.
Diversification Opportunities for KG Eco and Innowireless
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 151860 and Innowireless is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and KG Eco 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 KG Eco Technology 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 KG Eco i.e., KG Eco and Innowireless go up and down completely randomly.
Pair Corralation between KG Eco and Innowireless
Assuming the 90 days trading horizon KG Eco Technology is expected to under-perform the Innowireless. In addition to that, KG Eco is 1.19 times more volatile than Innowireless Co. It trades about -0.07 of its total potential returns per unit of risk. Innowireless Co is currently generating about 0.29 per unit of volatility. If you would invest 2,080,000 in Innowireless Co on November 8, 2024 and sell it today you would earn a total of 205,000 from holding Innowireless Co or generate 9.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KG Eco Technology vs. Innowireless Co
Performance |
| Timeline |
| KG Eco Technology |
| Innowireless |
KG Eco and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Innowireless
The main advantage of trading using opposite KG Eco and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco 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.The idea behind KG Eco Technology and Innowireless Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Innowireless vs. Genie Music | Innowireless vs. Wonbang Tech Co | Innowireless vs. Vitzro Tech Co | Innowireless vs. Jeju Bank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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