Correlation Between Inmax Holding and Cipherlab
Can any of the company-specific risk be diversified away by investing in both Inmax Holding and Cipherlab 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 Inmax Holding and Cipherlab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inmax Holding Co and Cipherlab Co, you can compare the effects of market volatilities on Inmax Holding and Cipherlab 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 Inmax Holding with a short position of Cipherlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmax Holding and Cipherlab.
Diversification Opportunities for Inmax Holding and Cipherlab
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inmax and Cipherlab is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Inmax Holding Co and Cipherlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipherlab and Inmax Holding 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 Inmax Holding Co are associated (or correlated) with Cipherlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipherlab has no effect on the direction of Inmax Holding i.e., Inmax Holding and Cipherlab go up and down completely randomly.
Pair Corralation between Inmax Holding and Cipherlab
Assuming the 90 days trading horizon Inmax Holding Co is expected to generate 1.98 times more return on investment than Cipherlab. However, Inmax Holding is 1.98 times more volatile than Cipherlab Co. It trades about 0.05 of its potential returns per unit of risk. Cipherlab Co is currently generating about -0.08 per unit of risk. If you would invest 5,300 in Inmax Holding Co on November 6, 2024 and sell it today you would earn a total of 400.00 from holding Inmax Holding Co or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inmax Holding Co vs. Cipherlab Co
Performance |
| Timeline |
| Inmax Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Cipherlab |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inmax Holding and Cipherlab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inmax Holding and Cipherlab
The main advantage of trading using opposite Inmax Holding and Cipherlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inmax Holding position performs unexpectedly, Cipherlab 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 Cipherlab will offset losses from the drop in Cipherlab's long position.The idea behind Inmax Holding Co and Cipherlab 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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