Correlation Between Basso Industry and Intai Technology
Can any of the company-specific risk be diversified away by investing in both Basso Industry and Intai Technology 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 Basso Industry and Intai Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and Intai Technology, you can compare the effects of market volatilities on Basso Industry and Intai Technology 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 Basso Industry with a short position of Intai Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and Intai Technology.
Diversification Opportunities for Basso Industry and Intai Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Basso and Intai is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry Corp and Intai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intai Technology and Basso Industry 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 Basso Industry Corp are associated (or correlated) with Intai Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intai Technology has no effect on the direction of Basso Industry i.e., Basso Industry and Intai Technology go up and down completely randomly.
Pair Corralation between Basso Industry and Intai Technology
Assuming the 90 days trading horizon Basso Industry Corp is expected to generate 1.41 times more return on investment than Intai Technology. However, Basso Industry is 1.41 times more volatile than Intai Technology. It trades about -0.01 of its potential returns per unit of risk. Intai Technology is currently generating about -0.02 per unit of risk. If you would invest 4,285 in Basso Industry Corp on September 3, 2024 and sell it today you would lose (15.00) from holding Basso Industry Corp or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basso Industry Corp vs. Intai Technology
Performance |
| Timeline |
| Basso Industry Corp |
| Intai Technology |
Basso Industry and Intai Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and Intai Technology
The main advantage of trading using opposite Basso Industry and Intai Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry position performs unexpectedly, Intai Technology 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 Intai Technology will offset losses from the drop in Intai Technology's long position.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
| Intai Technology vs. San Shing Fastech | Intai Technology vs. QST International | Intai Technology vs. WiseChip Semiconductor | Intai Technology vs. Novatek Microelectronics Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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