Correlation Between InnoTherapy and Synopex
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and Synopex 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 Synopex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and Synopex, you can compare the effects of market volatilities on InnoTherapy and Synopex 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 Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and Synopex.
Diversification Opportunities for InnoTherapy and Synopex
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InnoTherapy and Synopex is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex 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 Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of InnoTherapy i.e., InnoTherapy and Synopex go up and down completely randomly.
Pair Corralation between InnoTherapy and Synopex
Assuming the 90 days trading horizon InnoTherapy is expected to generate 5.12 times less return on investment than Synopex. But when comparing it to its historical volatility, InnoTherapy is 1.84 times less risky than Synopex. It trades about 0.02 of its potential returns per unit of risk. Synopex is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 303,809 in Synopex on September 4, 2024 and sell it today you would earn a total of 314,191 from holding Synopex or generate 103.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. Synopex
Performance |
| Timeline |
| InnoTherapy |
| Synopex |
InnoTherapy and Synopex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and Synopex
The main advantage of trading using opposite InnoTherapy and Synopex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, Synopex 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 Synopex will offset losses from the drop in Synopex's long position.| InnoTherapy vs. Kolon Life Science | InnoTherapy vs. JETEMA Co | InnoTherapy vs. Aminologics CoLtd | InnoTherapy vs. Daihan Pharmaceutical CoLtd |
| Synopex vs. Hanjoo Light Metal | Synopex vs. HJ ShipBuilding Construction | Synopex vs. MetaLabs Co | Synopex vs. Daekyung Machinery Engineering |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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