Correlation Between Incar Financial and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both Incar Financial and ITM Semiconductor 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 Incar Financial and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and ITM Semiconductor Co, you can compare the effects of market volatilities on Incar Financial and ITM Semiconductor 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 Incar Financial with a short position of ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and ITM Semiconductor.
Diversification Opportunities for Incar Financial and ITM Semiconductor
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Incar and ITM is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and Incar Financial 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 Incar Financial Service are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of Incar Financial i.e., Incar Financial and ITM Semiconductor go up and down completely randomly.
Pair Corralation between Incar Financial and ITM Semiconductor
Assuming the 90 days trading horizon Incar Financial Service is expected to generate 1.74 times more return on investment than ITM Semiconductor. However, Incar Financial is 1.74 times more volatile than ITM Semiconductor Co. It trades about 0.21 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.31 per unit of risk. If you would invest 513,000 in Incar Financial Service on August 29, 2024 and sell it today you would earn a total of 103,000 from holding Incar Financial Service or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. ITM Semiconductor Co
Performance |
| Timeline |
| Incar Financial Service |
| ITM Semiconductor |
Incar Financial and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and ITM Semiconductor
The main advantage of trading using opposite Incar Financial and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Shinhan WTI Futures | Incar Financial vs. Finebesteel |
| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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