Correlation Between Inmax Holding and RiTdisplay Corp
Can any of the company-specific risk be diversified away by investing in both Inmax Holding and RiTdisplay Corp 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 RiTdisplay Corp 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 RiTdisplay Corp, you can compare the effects of market volatilities on Inmax Holding and RiTdisplay Corp 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 RiTdisplay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmax Holding and RiTdisplay Corp.
Diversification Opportunities for Inmax Holding and RiTdisplay Corp
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inmax and RiTdisplay is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Inmax Holding Co and RiTdisplay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiTdisplay Corp 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 RiTdisplay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiTdisplay Corp has no effect on the direction of Inmax Holding i.e., Inmax Holding and RiTdisplay Corp go up and down completely randomly.
Pair Corralation between Inmax Holding and RiTdisplay Corp
Assuming the 90 days trading horizon Inmax Holding is expected to generate 4.01 times less return on investment than RiTdisplay Corp. But when comparing it to its historical volatility, Inmax Holding Co is 1.03 times less risky than RiTdisplay Corp. It trades about 0.04 of its potential returns per unit of risk. RiTdisplay Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,225 in RiTdisplay Corp on September 3, 2024 and sell it today you would earn a total of 1,515 from holding RiTdisplay Corp or generate 35.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inmax Holding Co vs. RiTdisplay Corp
Performance |
| Timeline |
| Inmax Holding |
| RiTdisplay Corp |
Inmax Holding and RiTdisplay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inmax Holding and RiTdisplay Corp
The main advantage of trading using opposite Inmax Holding and RiTdisplay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inmax Holding position performs unexpectedly, RiTdisplay Corp 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 RiTdisplay Corp will offset losses from the drop in RiTdisplay Corp's long position.| Inmax Holding vs. RiTdisplay Corp | Inmax Holding vs. Medigen Biotechnology | Inmax Holding vs. PlayNitride | Inmax Holding vs. Chernan Metal Industrial |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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