Correlation Between Elan Microelectronics and Inmax Holding
Can any of the company-specific risk be diversified away by investing in both Elan Microelectronics and Inmax Holding 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 Elan Microelectronics and Inmax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elan Microelectronics Corp and Inmax Holding Co, you can compare the effects of market volatilities on Elan Microelectronics and Inmax Holding 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 Elan Microelectronics with a short position of Inmax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elan Microelectronics and Inmax Holding.
Diversification Opportunities for Elan Microelectronics and Inmax Holding
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elan and Inmax is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elan Microelectronics Corp and Inmax Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmax Holding and Elan Microelectronics 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 Elan Microelectronics Corp are associated (or correlated) with Inmax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmax Holding has no effect on the direction of Elan Microelectronics i.e., Elan Microelectronics and Inmax Holding go up and down completely randomly.
Pair Corralation between Elan Microelectronics and Inmax Holding
Assuming the 90 days trading horizon Elan Microelectronics is expected to generate 1.88 times less return on investment than Inmax Holding. But when comparing it to its historical volatility, Elan Microelectronics Corp is 1.43 times less risky than Inmax Holding. It trades about 0.07 of its potential returns per unit of risk. Inmax Holding Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Inmax Holding Co on September 14, 2024 and sell it today you would earn a total of 3,740 from holding Inmax Holding Co or generate 225.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elan Microelectronics Corp vs. Inmax Holding Co
Performance |
| Timeline |
| Elan Microelectronics |
| Inmax Holding |
Elan Microelectronics and Inmax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elan Microelectronics and Inmax Holding
The main advantage of trading using opposite Elan Microelectronics and Inmax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elan Microelectronics position performs unexpectedly, Inmax Holding 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 Inmax Holding will offset losses from the drop in Inmax Holding's long position.| Elan Microelectronics vs. AU Optronics | Elan Microelectronics vs. Innolux Corp | Elan Microelectronics vs. Ruentex Development Co | Elan Microelectronics vs. WiseChip Semiconductor |
| Inmax Holding vs. Elan Microelectronics Corp | Inmax Holding vs. Song Shang Electronics | Inmax Holding vs. Lung Hwa Electronics | Inmax Holding vs. Tai Tung Communication |
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 CEOs Directory module to screen CEOs from public companies around the world.
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