Correlation Between InnoTherapy and GS Retail
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and GS Retail 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 InnoTherapy and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and GS Retail Co, you can compare the effects of market volatilities on InnoTherapy and GS Retail 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 InnoTherapy with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and GS Retail.
Diversification Opportunities for InnoTherapy and GS Retail
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InnoTherapy and 007070 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and InnoTherapy 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 InnoTherapy are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of InnoTherapy i.e., InnoTherapy and GS Retail go up and down completely randomly.
Pair Corralation between InnoTherapy and GS Retail
Assuming the 90 days trading horizon InnoTherapy is expected to generate 1.27 times more return on investment than GS Retail. However, InnoTherapy is 1.27 times more volatile than GS Retail Co. It trades about 0.39 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.31 per unit of risk. If you would invest 827,000 in InnoTherapy on October 26, 2024 and sell it today you would earn a total of 140,000 from holding InnoTherapy or generate 16.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. GS Retail Co
Performance |
| Timeline |
| InnoTherapy |
| GS Retail |
InnoTherapy and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and GS Retail
The main advantage of trading using opposite InnoTherapy and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| InnoTherapy vs. Sung Bo Chemicals | InnoTherapy vs. SH Energy Chemical | InnoTherapy vs. Barunson Entertainment Arts | InnoTherapy vs. Pan Entertainment Co |
| GS Retail vs. KB Financial Group | GS Retail vs. Shinhan Financial Group | GS Retail vs. Hana Financial | GS Retail vs. Woori Financial Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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